How to inlcude renovations in your next home purchase

Are you considering including renovations in your next home purchase? Each insurer (CMHC, Genworth and CG) has their own guidelines however here are the basics on how it works:

·         You can generally add up to 10% of the value of your purchase price into the mortgage (potentially to 20%, depending on the lender and insurer)

·         It is important to note that your mortgage will be based on the total improved value which means that your down payment and closing costs will be increased

o   For example, if you are purchasing a home for $200,000 and you plan to include $20,000 in renovations, your new purchase price becomes $220,000 and you are required to put $11,000 down instead of $10,000

·         You will have to provide quotes to for the work that is going to be completed prior to the mortgage being approved

o   Items that can be removed from the home (appliances, furniture ext) cannot be included as renovations

o   You can do the work yourself or have a contractor complete it

·         Once the work is complete, you will have to provide proof to the lender by way of receipts or an inspection

·         Once the lender is satisfied that the work is complete, they will reimburse you the funds. This is very important to note. They do not provide the funds up front, they will only reimburse you once the work is complete

 

For more information on these programs or for any mortgage related questions, please do not hesitate to contact me.

http://www.christinebuemann.com