Found a home with great potential but it needs a little TLC - Purchase Plus Improvements

This product is ideal for consumers looking to purchase a home that has great potential but needs a little TLC. The Purchase Plus Improvements program allows you to make improvements immediately after taking possession of your new home and have the costs rolled into one easy-to-manage mortgage*.  The best part is the mortgage interest rate is not affected....no high interest second mortgages or additional Lines of Credit required.

Acceptable loan purpose

• Purchase transactions
• Single advance if improvements are less than $40,000 or 20% of initial value.
• Multiple advances to a maximum of four,  if improvements exceed $40,000 or 20% of initial value.
• Available for Secondary Homes

Eligible properties

• Maximum four units with at least one unit occupied as the principal residence
• New construction or existing properties

Loan-to-value ratio limits

• One and two units - 95% (includes purchase amount and improvements)
• Three and four units - 90% (includes purchase amount and improvements)
• Lending value is based on the lesser of the improved property value or the sum of the purchase price plus direct costs associated with the improvements*

Amortization options

• LTV > 80%: Up to 30 years
• LTV ≤ 80%: Up to 40 years (not all lenders offer 40 year amortization)

 STEPS TO FOLLOW

• Step 1: Find a house and have a good idea of what renovations need to be done and a rough idea of how much it will cost.
• Step 2: You can get an approval based on the house “as-is”.  You then go and get firm price quotes for the work that needs to be done.  Make sure the quotes specifically state the work that is to be complete.
• Step 3: You will then have your mortgage approval revised to include the price of renovations.
• Step 4: You take possession of your new home and start the renovations. 
• Step 5: The work must be confirmed complete. 
• Step 6: Your lawyer will be instructed by the lender to release the money for the renovations.