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Almost a Perfect Home - Purchase Plus Improvements

on 17 March 2014
Purchase Plus Improvements

Often when homebuyers are looking for that perfect home, they come across one that almost meets that vision, but requires a little work. Maybe it needs a little TLC or some renovations to bring it alive. How do you make this happen?

The Purchase Plus Improvements program is quite popular in the Vancouver real estate market, as it allows for homebuyers to renovate their property immediately after possession. It is available to most homeowners, who have the extra cash upfront to make the initial improvements and are okay with being reimbursed when the work has been completed. The increase of the value of the property is usually limited to 10% - 20% of the purchase price or appraised value.

Popular examples of property improvements
  • New roof
  • New patio
  • Update kitchen/bathroom
  • Energy efficient windows/doors
  • Flooring
  • Addition of a garage
  • Paint
  • Basement suite
It excludes anything that can be moved:
  • i.e. appliances
The process:
  1. As part of the application, the lender requires the borrower to submit a list of improvements and quotes
  2. Mortgage will be approved for the purchase price and the cost of the improvements.
  3. Down payment is based on the “improved” value which is used to determine maximum loan to value
  4. The mortgage will complete based on the purchase price, but the funds for the improvements will be held in trust at the lawyers office
  5. Work is done
  6. Proof of work being completed is required
  7. Funds in trust are transferred to the borrower

For more information please contact our office.

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