You’ve found your clients the perfect neighbourhood: fantastic schools, exclusive amenities, it’s close to shopping, and the commute to work will be easy. They love one or two things from each of the 30 homes you’ve shown them, but none of them are “the one”. You keep showing houses, and finally you found one that meets their criteria, but the tub and toilet are pink, it has harvest gold shag carpet and the basement was developed with 1970’s wood panelling. Your clients love everything else about the house, except the cosmetics; your sale is dead – or is it?

Let me introduce you to Purchase Plus Improvements program. This mortgage allows your clients to purchase their dream home and fund the necessary improvements from the mortgage proceeds, rather than coming from your client’s savings or line of credit.

THE BASICS

If a potential buyer wants to improve their prospective house, they must provide a down payment of 5% of the improved value of the home – an option with the Purchase Plus Improvements program. The improved value of the home is the cost of the home plus the cost of the improvements up to a maximum 10% of the purchase price, or $40,000.

For example, if the house is $400,000 and the contractor gives a quote for the new kitchen at $40,000 then the buyer must have 5% of $440,000 ($22,000). The improvements must be permanent in nature, so getting new appliances, barbecue, and hot tub will not cut it. However, updates to kitchens (that could include appliances), bathrooms, garage, and basement renovations etc. are acceptable.

As a Mortgage Broker, I will assist your client through the financing requirements and provide legal documentation to the contractor to confirm that payment is being held in trust by a lawyer and will be dispensed upon successful completion.

Other conditions can apply, so speak with me to confirm the nature and intent of the improvements desired.

THE SOLUTION

Purchase Price – $400,000
Improvements – up to a maximum of $40,000
Total Loan – $440,000
Minimum Down payment – $22,000

Ta da – Purchase Plus Improvements! Problem solved and they get to pick the improvements they desire.

Your clients are now over the moon excited to have purchased their dream home, thanks to your expertise and thinking outside the box.

Great service, expert advice, and a job well done. Give me a call to discuss details!

Co-written with the team from Your Mortgage Advantage – Martin Breeze, Brooke Juba, Garett Courtier and Jeff McGinn