I wanted to share an experience my client just had.
He was looking for his first home and had saved up a down payment of 20% to avoid the high ratio mortgage insurance. However, with the current activity in the Vancouver real estate market being extremely hot, he didn’t find any properties in his price range.
All the condos he found were really outdated.
After more searching there was a potential older (23 yr old) condo. The apartment has not been updated since it was built…. Old moldy looking carpets, laminate in the bathroom, a broken stove etc. BUT the building was very well run and layout was exactly as he wanted!
How exactly did this old and outdated condo become his dream home?
We looked at the PURCHASE PLUS IMPROVEMENTS option.
The name of that option sounds promising, but let’s break down the numbers.
DOWN PAYMENT $40,000 (20%)
MTG REQUEST $160,000 (80%)
RENOS NEEDED $50,000
PURCHASE $200,000 + IMPROVEMENTS $50,000 = COMPLETED VALUE $250,000
DOWN PAYMENT $50,000 (20%) – client had extra savings in his TFSA
NEW MTG REQUEST $200,000 (80%)
There are just a few extra steps to getting this type of mortgage done. For example, getting a contractor to provide a list of renovations and a breakdown of costs would be one of them.
If this sounds like an option for you, give your mortgage planner a call and they will be able to provide more info on the program.
Just another way we can help you purchase your “newer” dream home!
More info about the CMHC Improvements Plan: http://www.ratehub.ca/blog/2013/03/what-is-a-cmhc-improvements-mortgage/