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BC Mortgage - Purchase plus improvement program |
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Apply using Invis' secure 128-bit connection:
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Add on the cost of the improvement to your mortgage
You�ve found the house that you like but it needs to be renovated. You can, of course, use your credit cards or cash-in some of your investments to pay for the renovations. Another option is to take advantage of CMHC�s or Genworth�s Purchase + Improvement (P+I) program. The program allows you to add on the renovation cost to the purchase price, so you benefit from the low mortgage interest rate and make only one payment.Say, for example, the house is priced at $200,000 but it needs another $10,000 in renovations.��You can add on the renovations to the purchase price and CMHC or Genworth will lend against the total value (purchase price plus the renovation cost).
| Purchase price | $200,000 |
| Renovations | $ 10,000 |
| Total cost | $210,000 |
| Lending value | $210,000 |
| Max. Mortgage | $199,500 (95% of $210,000) |
| Min. down payment | $ 10,500 |
Should you decide to apply under either CMHC or Genworth'�s P + I program, you will need to think about timing issues. The borrower is paid only upon completion of the renovations. This means that either you front the money (possibly using your line of credit or your credit cards) or the renovator will lend you the money until you are reimbursed by the lender.
Secondly, before your broker can submit the transaction to the lending institution, you will need to supply him with quote and/or a renovation contract. Since, in today�s market, subject removal days are short, you will need to have the quotes/contract available a few days before subject removal date to give the lender some time to process the transaction.
"My job is done when you know your options"
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