Buying a Home that Requires Improvements

Question: We found our dream home - the only problem is it needs a new roof and the furnace is very old. We don't have the funds to do this AND buy the house. Do we have any options?

Answer: It is exciting to find the home that you've been looking for...not that exciting to know that, if you buy this house, you're going to have to put money into it right away. There are a couple of options that you can consider...

1. 100% Financing - Instead of putting your 5% down payment toward the purchase of your home you can use this money to do the needed repairs. So, if you were buying a home for $200,000.00 you can save the down payment of $10,000.00 and use these funds toward the new roof and furnace.

2. Purchase Plus Improvements - The repairs you need to do to the home, such as new roog and a new furnace, may be eligible for the Purchase Plus Improvement Program offered by some mortgage lenders. In essence, you can purchase a home and include the cost of any immediate renovations into the mortgage. If the estimate for a new roof is $5,500.00 and the new furnace is $7,500.00 the lender may see the "as improved" market value of the home to now be $213 000.00. Your mortgage would now be based on $213,000.00 and your down payment would be 5% of this new value ($10,650.00). Your direct, out of pocket, expense amounts to $650.00. The improvements are completed and paid for once you move in. This program is also available as Refinance With Improvements. Knowing all the options available for our clients is our job! The services of our mortgage agents are of no charge and can save you time and money.

Email Lisette at lharris@tmacc.com or call (905) 529-1199 with your questions!