Purchase Plus Improvements Product Improved
The Purchase Plus Improvements Mortgage plan is designed to help homebuyers finance both the purchase of a home and the cost of renovations or improvements. Here’s how it typically works:
1. Home Purchase: You start by purchasing a home that you intend to renovate or improve. This can be a new purchase or a refinance if you already own the property.
2. Renovation Budget: You determine the amount of money you’ll need for the renovations or improvements you want to make. You can borrow up to $40,000 extra for renovation money.
3. Mortgage Application: You apply for a mortgage with a lender that offers the Purchase Plus Improvements program. During the application process, you’ll need to provide details about the renovations you plan to undertake and obtain quotes from contractors if required.
4. Appraisal: The lender will typically send an appraiser to assess the current value of the property and the estimated value after the renovations are completed.
5. Mortgage Approval: If your application is approved, the lender will provide you with a mortgage that includes the purchase price of the home and the renovation budget. The total amount should not exceed the appraised post-renovation value.
6. Renovation Funds: Once the mortgage is funded, the renovation funds are typically held in trust at the lawyers office until the work is completed.
7. Renovation Work: You hire contractors and begin the renovation work.
8. Completion and Inspections: Once the renovations are finished, the lender may conduct a final inspection to confirm that the work has been completed satisfactorily.
9. Release of Funds: Once the lender is satisfied with the renovations, they release the funds from the trust or escrow account to pay for the improvements.
It’s important to note that the specific details and requirements of the Purchase Plus Improvements Mortgage plan can vary from lender to lender and may also depend on your creditworthiness and the scope of the renovations.
Just recently there is a new lender on the market that has come out with a purchase plus improvement product where clients can borrow up to $100,000 for improvements opposed to just the $40,000. Opening up the budget to this amount gives a lot more leeway as to what home owner can purchase and the type of renovation they can complete.
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