Sometimes you may walk away from a condo that needs some renovations because you are already spending your hard earned savings on the down payment and closing costs. To help you avoid losing out on a property for this reason, here is an article from Igor Geshelin: one of our trusted partners as a Mortgage Market Professional with The Bentley Group at Premiere Mortgage Centre. The Bentley Group is Premiere’s top producing Team in Atlantic Canada, and Premiere has recently had the distinct honour of being awarded “Mortgage Brokerage of the Year” at the CMP Canadian Mortgage Awards. Here is what Igor has to say:
You’ve found the perfect condo. The location is ideal, the price is in your budget, the layout is perfect and it’s just the right amount of square feet for you and your favorite things. But the kitchen cabinets look like someone made them out of a station wagon’s wood grain panels, and your feet are submerged ankle deep in a sea of what you sincerely hope is carpet.
Updating these items to modern day standards is going to set you back a few thousand dollars, and as you are about to purchase a property, the last thing that you need is another expense on top of your down payment, 1.5% Deed Transfer Tax (some may call it a government money grab), solicitor fees, etc. Not to worry, there is a mortgage product just for you: Purchase Plus Improvements is here to save the day.
Designed specifically for scenarios where some renovations are required to be completed to a property at the time of purchase, this program simply requires up front quotes for the intended work to be submitted for lender approval at the time of securing your mortgage for the purchase. The renovation funds are held in trust until the work is complete, and then released directly to you to pay the contractors, or reimburse yourself if you have already paid for the work out of pocket in the meantime.
This is a spectacular way of including value-add property improvements directly into the mortgage, and especially at today’s historically low rates this is by far the lowest-cost approach to financing a renovation project. If you were to wait a year after purchasing and pay for these items on your credit card or a line of credit, your cost would be substantially higher. To put it in perspective, adding an extra $10,000 worth of improvements to your mortgage today would only be an additional $21/month. It doesn’t’ get much better than that, and your kitchen will be transformed into an Ikea showroom in no time!
If you have any questions about Purchase Plus Improvements, or any other mortgage questions for that matter, don’t hesitate to contact Igor at igor.geshelin
As always if you are looking to buy or sell a condo feel free to contact us.