This week on LIVE With The House Mom: Kim Boehkle, Mortgage Agent with Champion Mortgage Inc. was on the show talking about a home purchase and renovation mortgage product called Purchase Plus Improvements.
This unique mortgage product allows you to purchase a home with as little as a 5% down-payment and have the cost of renovations added to the mortgage! Financing a renovation is often tricky for people just getting into the real estate market.
Over the years, I’ve worked with many clients who have found homes that were *almost* perfect for them, but the homes needed some work, maybe a new kitchen or a new bathroom, new flooring or a new furnace, a new roof or maybe the home didn’t have a finished basement. After saving up for a down-payment, renovation financing is on a lot of peoples minds because they do not have the extra cash flow to pay for renovations, especially first time home buyers! This mortgage product can help with this problem!
Purchase Plus Improvements is a program that allows your lender to loan you additional funds to cover the cost of improvements to the home.
Here is an example that Kim Boehkle provided during the broadcast:
Let us say that you are pre-approved for a $500,000 mortgage. You are shopping for a home and find a property in the $460,000 price range, that requires around $40,000 in renovation financing to be perfect for you! To purchase this home, you would require a $23,000 down-payment. You decide to purchase the home and go forward with the $40,000 in home improvements. Now, in order to qualify for the additional $40,000 worth of renovation financing on the mortgage, you will have to provide an additional $2000 down-payment. That’s it! You provide the extra $2000 and you receive the $40,000 for the renovations you completed. Your monthly mortgage payment will increase by approximately $180 per month!
Let me walk you through the process:
- You talk to your mortgage agent and get pre-approved for a mortgage and renovation financing.
- We look for a property the suits your needs.
- We find a property that, including renovation financing will be within your pre-approved budget.
- We make an offer on the property conditional on final Financing approval.
- We work with services providers to compile quotes for the work that you would like to do to the property.
- We submit the quotes along with the other paperwork required for your mortgage approval.
- We wait for our approval and remove our conditions.
- You eventually take possession of the property and begin your renovations. **You will have to fund the renovations up front***
- Once the work has been completed, you will submit the invoices to the lender.
- They may request a home appraisal or inspection of the property to guarantee that the work was completed.
- Finally, you receive the additional mortgage money for your renovation financing and are able to pay back the money you may have borrowed to fund the renovation project.
This mortgage product is perfect for anyone who wants to complete some home renovations without having to dip into their savings! Champion Mortgages Inc can help!
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Coming Up Oct 10th – I’ll be welcoming Ghost Hunter Kim Hadfield from Halton Paranormal! She will be on the show talking about Haunted Houses – Fact or Fiction?!