Helping you update your new home by adding the renovation costs to a mortgage using a Purchase Plus Improvement Program. Buy a home with good bones and simply update it to your personal style!

How does it work?

  • Clients can borrow the funds to update their home immediately after closing.
    • Uninsurable – $40,000 or 20% of ‘initial’ value, whichever less.
    • Insured/Insurable: CMHC: Maximum 10% of the ”As-Improved Value & Sagen/Canada Guaranty: Total improvements as approved by the insurer. No progress draws.
  • Qualify on the ‘as improved’ value of the home. (i.e. $650,000 purchase price with $60,000 of improvements, LTV and downpayment calculated at $710,000).
  • Appraisal required stating the ‘as is’ value of the property at time of purchase and ‘as improved’ value once improvements complete.
  • Detailed list of improvements, along with all quotes are required up front for the work to be completed.
  • Inspection report by a lender approved appraiser stating the work has been completed to allow funds to be released from the Solicitor.
  • Lender advances the entire committed amount to the Solicitor on closing.
  • Funds to begin the work come from the borrower(s) own resources and are reimbursed to the client once the work has been completed.
  • Consider a *cash-back mortgage (details below) for up to 3% of the mortgage advanced at closing.

How long do you have to complete the work?

  • Uninsurable – 180 days
  • Insured/Insurable – 270 days.

What kinds of improvements can qualify?

  • Cosmetic updates including; kitchen, bathroom, flooring, painting, lighting, windows, doors.
  • Landscaping, patio/decks, driveway.
  • Roofing, insulation.
  • Detached garage.
  • If improvements are structural, a copy of the building permit is required.
  • Always consider the state of the property and improvements required, the improvements should increase property value.

What if you don’t have upfront funds to do the work?

  • Consider a *cash-back mortgage (details below) for Insured/Insurable purchases.
  • Qualifying clients can receive between 1-3% cash back to pay for home improvements, clear debt or use for closing costs.

*Combine the Cash-back and Purchase Plus Improvement programs:

  • The cash back is calculated on the total approved mortgage balance and is advanced on the initial closing.
  • These funds can be used as a deposit for the contractor, or to increase the total budget for the improvements.
  • Cash-back can not be used for initial down payment.

One of my favourite prime lenders also offers:

  • We use an inspection report upon completion to show the work has been finalized and don’t chase the client for receipts for ease of process. For improvements of $15,000 or less, receipts/invoices and photos of the completed work may be acceptable.
  • Appraisal rebate program for Insured and Insurable mortgages over $200,000 to help facilitate the additional costs incurred (max. rebate is $400.00 for a $400,000+ mortgage).

Next Steps

When it’s harder to qualify, you may be looking at a less expensive option that requires a bit of work. Speak with an experienced mortgage professional that can help you evaluate whether a Purchase Plus Improvement Mortgage, combined with a cash-back program or not, is the best option for your new purchase.