K - Welcome to WHO’S WHO IN THE 902. I’m Kelly Williams from Keller Williams Select Realty and today on Mortgage Minute with Bruce Lusby of Premiere Mortgages he is going to explain to us what is a PURCHASE PLUS IMPROVEMENT MORTGAGE and when should a buyer consider it? Good morning Bruce.

B – Good morning Kelly. The PURCHASE PLUS IMPROVEMENT MORTGAGE is a great tool. It adds flexibility when a buyer might find a house that’s not just quite right for them. So they can do a quick renovation to the house and wrap those renovation costs into the new home. So there are a few key points to Purchase Plus Improvement Mortgage. First is that it is 20% of the purchase price with a maximum of $40,000. I have a lender that will go up to $100K and one lender that doesn’t have any limit at all. The quotes for the renovation need to be upfront and provided to the lender. They won’t look at the mortgage file till they have the quotes. Here’s the key – the lender will not release the purchase plus improvement funds until the renovations have been completed, so the client needs to either A) fund those renovation costs themselves and then they are reimbursed once they are done or B) find a contractor that’s willing to do the renovations and know that they won’t be paid until the renovations are done and completed. Finally not all renovations are acceptable. A new swimming pool wouldn’t be acceptable but some cosmetic upgrades like flooring and countertops or fixing a roof or expanding the house would.

K – That is amazing news. I have had clients in the past ask about something like this and now there is an option for them. Thank you Bruce and thank you for joining us for this week’s Mortgage Minute with Bruce. Want more information call Bruce at 902 210 0515, email: bruce.lusby@.premieremortgage.ca. For all your real estate needs, I’m Kelly Williams. Till next week.