Since home refinancing has been limited to a maximum 80% of the value of your home, an increasing number of buyers are looking at Purchase Plus Improvements products to meet their home financing needs.
This may be an option worth examining if you would like to buy a new home that needs updating. Whether you’re purchasing a home that needs just a small renovation or a major redo, a Purchase Plus Improvements mortgage can help you transform an ordinary house into your dream home.
How Purchase Plus Improvements works
Purchase Plus Improvements programs enable you to obtain funding for the cost of the home purchase as well as the cost of the renovations – up to a maximum value of 95% of the total purchase price.
Conditions of the program include:
- As a borrower, you must provide a list of improvements with quotes at the time of application. As a result, more time may be required for Subject Removal
- The initial advance of funds at time of closing will be up to 95% of the approved value of the property minus the cost of improvements
- The balance of the funds will be held in trust by the solicitor until completion of the approved improvements (time limits may be imposed), which is confirmed via:
- An inspection report or
- Confirmation from a certified appraiser or
- An invoice from the contractor who completed the improvements
- Usual sub-search and Construction Lien Act requirements are to be adhered to at the time of release of holdback
- Some restrictions may apply depending on the lender
Information Compliments of Dominion Lending
DID YOU KNOW...
The Home Buyers’ Plan (HBP) is a program for first-time homebuyers that allows you to withdraw funds from your RRSPs to buy or build a home. You can withdraw up to $25,000 tax-free ($50,000 for a couple). Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP. Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You’ll have to repay an amount to your RRSPs each year until your HBP balance is zero. If you don’t repay the amount due for a year, it will have to be included in your income for that year. Click here for more information from Canada Revenue Agency.