In my earlier blog I mentioned a name of Oxana Petrenko, mortgage agent who is ready to help our clients with any mortgage products available today. Last time Oxana touched a subject of affordable home ownership program. Now she would like to share information that will be interesting for those who is buying an older piece of property in the need of renovations or personal touches. Program is called CMHS Improvements Mortgage. It is not a new product on the market, but is still little known program. Here how it works:
“Mortgage loans are available to cover the purchase price of a home and an amount to pay for immediate major renovations or other improvements that the purchaser may wish to make to the property.
This option eliminates the need to obtain secondary financing after the purchase to pay for improvements. The homebuyer obtains a single first mortgage, makes a single mortgage payment, and benefits from first mortgage interest rates.
The Loan will be based on the purchase price plus the actual cost of improvements. Prior to approval, CMHC will determine the market value of the property after renovations/ improvements. The lending value will not exceed the market value of the property after renovations/improvements.
In order to do this, you must add a condition in your Agreement to Purchase that says you want a contractor to inspect the home before closing. The contractor will provide a quote that breaks down the scope of work and the costs associated with it. Once both CMHC and the lender approve the improvement amount, it is added to the mortgage loan.
Applicants must have the following:
• A minimum of 5% down payment of total cost (purchase price plus renovations/ improvements)
• Cost estimates for renovations/improvements.
• Qualifications to obtain a CMHC insured loan through an approved lender.
Will be happy to provide you more information if needed.”