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Blog by Ottawa Real Estate | Ottawa Homes for Sale | Ottawa Relocation | August 29th, 2011


Finance Home Upgrades with a
Purchase Plus Improvements Mortgage

Home Upgrades

If you intend to buy a home that needs some immediate upgrades, a "purchase plus improvements" mortgage may be right for you.  This type of mortgage covers the purchase price of the home, plus any renovations that would increase the value of the property, such as finishing a basement or redoing the kitchen.  For current homeowners, a "refinance with improvements" option may be available.  The Hamre Team has some great contacts for home improvements. We can arrange for all the improvements to be completed before your moving date. We make moving to a new home simple and as stress free as possible.

Let us guide you through the process:

Step 1: Mortgage pre-approval 
Arranging a pre-approved mortgage not only protects you if interest rates increase, it also gives you a clear price range for your new home.   

Step 2: Obtain cost estimates for upgrades 
Once you have found a home, we can assist you in obtaining written quotes from licensed contractors on the renovations you plan.  These quotes will be used as the estimate for renovation funds that will be forwarded to you after the projects are completed.

Step 3: Mortgage application 
When you are applying for the mortgage, your lender will add the estimated costs of the renovation into the lending agreement.  For example, with a 5% down payment, your mortgage broker would apply to a lender for 95% of the "as improved" market value, which will be higher than the actual purchase price. 

Step 4: Finalize purchase 
The Hamre Team and your mortgage broker will walk you through this part of the process.  The funds for renovations will be sent to your lawyer "in trust" when the mortgage closes. 

Step 5: Complete upgrades 
The lender will "hold¬ back" funds for the renovations until the work has been completed and inspected, at which time the contractor can be paid.

Make your new home your home! Visit the Hamre Team of RE/MAX web site  http://www.WeKnowOttawa.com for more moving tips and a selection of the top listing in the Ottawa real estate market.