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Purchase Plus Improvements Mortgages

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WHAT IS IT?

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A Purchase Plus Improvements mortgage in Canada is a financing option that allows homebuyers to borrow additional funds on top of their mortgage to cover the cost of renovations or improvements to a property they are purchasing. This type of mortgage is designed to help buyers purchase a home that needs work and immediately finance the upgrades.

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Did you find the home of your dreams, but the kitchen needs massive improvements and taking on additional monthly payments is to much?

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The Improvements Program will allow you to up to $40,000 or 10% of the value of your home for improvement money - Built right into your nice low mortgage rate! Some exceptions can be made on larger amounts.

How it works:
 

Work directly with me to keep everything smooth and easy. It isn't complicated, however lenders vary on their submission process and their completion times. I make it easy to do complete. 

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  •  Get Pre-Approval:

    •  Contact ME, your mortgage broker or lender to get pre-approved for a mortgage.

    •  Discuss your intention to apply for a Purchase Plus Improvements mortgage.

  • Purchase the Property:

    •   Complete the purchase of the property.

    •   Ensure funds for renovations are secured (upfront funding required).

  • Initial Planning:

    • Determine the scope of your renovation project.

    • Find a property you want to purchase that requires improvements.​

  • Obtain Quotes:

    • Get detailed quotes for the renovation work from contractors or stores like Home Depot or Rona.

    •  Ensure quotes itemize each item and labor costs.

  • Submit Quotes:

    • Your mortgage broker will submit the renovation quotes to your lender for approval.

    • Ensure the improvements are value-adding and approved by the lender (no appliances, hot tubs, or pools).

  • Loan Approval:

    • The lender will approve a mortgage based on the lesser of:

    • The improved property value after renovations.

    • The sum of the current property value plus the direct renovation costs.​

  • Renovation Funds Holdback:

    •  The lender holds back the renovation funds in trust until work is completed and approved.

  • Complete Renovations:

    • Use your own funds, a Home Depot/Rona card, or other financing to start and complete the renovations.

    • Keep all receipts and documentation of paid expenses.

    • You usually have between 90 and 120 days to complete the renovations. 

  • Final Inspection:

    • Notify your mortgage broker or lender when renovations are complete.

    • If renovation costs are under $15,000, submit receipts for reimbursement.

    • If renovation costs are over $15,000, arrange for a lender-certified appraiser to inspect the completed work (at your cost).

  • Release of Funds:

    • Once the final inspection and appraisal report confirm the increased property value, the lender will instruct the lawyer to release the holdback funds to you.

  • Rental Properties (if applicable):

    • Note that there are limited lenders for rental properties.

    • Confirm with your lender about the availability and conditions for rental property improvements.

 

Share Information:

  If you know someone planning renovations, share this process with them to help them navigate the Purchase Plus Improvements mortgage.

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