Purchase Plus Improvements Red Deer Mortgage
Are you thinking about fixing and flipping a home? Do you love a particular property but know it needs a lot of work? Do you want to buy an older home and turn it into your dream home? Regardless of your real estate dream, many worry that their ability to secure a mortgage in Red Deer to buy such a home is impossible. Call Red Deer Mortgage Brokers at 587-315-3525 to discuss your Mortgage Options. We can offer these amazing products with low mortgage rates. Jodi Whalen and her team are your Top Red Deer mortgage broker, and she’s here to answer your questions and guide you through the process of finding the best mortgage for your new home in Red Deer.
What are your options for financing Red Deer home renovations mortgage?
“Renovation Mortgages” permit home owners to renovate either a newly purchased home or one they’ve just refinanced. These loans can also allow you to build a new home. When you take out a renovation mortgage, the cost of the home improvements are rolled into the total mortgage balance. You’ll be able to benefit from the low interest rates charged on a primary mortgage. They also have a single mortgage payment. In many cases, they can do this without putting a full 20% down on the home. You can put down as little as 5% of the down payment for a half million dollar home, and 10% down payment on the remaining balance over half a million dollars. Yes, these loans based the amount you’re allowed to borrow off the as-improved value – what the property is worth after you’ve finished work. CHMC can approve a loan up to 95% of the ‘as improved’ value of the property or a new home.
How do you get this type of mortgage? The first step is making the offer on the Red Deer home contingent on securing the mortgage. If you don’t qualify for the mortgage, you don’t close on the home. Qualifying for the loan requires having quotes from a contractor estimating the cost of making the improvements and how much they add to the value of the home.
Once you’re approved for the mortgage and you have completed the improvements within the 90 days, a lawyer will release the hold back to you for the value of the improvements. When the work is completed, an inspection of the property must be done to verify the work was done. You’ll also have to submit copies of the receipts to the lender so they can release hold back funds to your attorney as work is going on.
Renovation mortgages are ideal for those who love a home but need to upgrade it to suit their tastes, such as when it needs new paint, new carpets and new cabinetry. Renovate that basement to create more living space. Open up the living area and update the kitchen.
If you put more than 20% down on the property or have more than 20% equity, a Home Equity Line of Credit may be a better choice for you. Talk to your Red Deer Trusted mortgage broker, Jodi Whalen, today to determine what is right for you.
|Usual way of financing:|
|Less 5% down payment||$15,000.00|
|Plus 4% insurance premium||$11,400.00|
|Mortgage payment @ 3.5%||$1,483.85/month|
|Purchase plus Improvements:|
|AS IMPROVED VALUE OF HOME||$320,000.00,/|
|Less 5%of as improved value||$16,000.00|
|Plus 4% Insurance premium||$12,160.00|
|Mortgage payment @ 3.5%||$1,582.77/month|
In this example, you are able to personalize the home to suit your needs and improve the value of your home, without waiting until you could afford to do the changes.
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