Financing’s best-kept secret: A purchase plus improvements mortgage

The concept is simple. You would like to buy a home, but the home needs work that you cannot afford right away. You provide the lender with a quotation for the work that needs to be done and they add it to the amount of mortgage you need to buy the house. As long as you qualify, you can afford the home and the necessary improvements, right away.

The benefits

Not only can you afford your renovations immediately, you also finance them at the same low rate as your mortgage. Plus, you do not have to apply for additional financing (which can be especially hard for first-time homebuyers).

How it works

When you make an offer, make the offer conditional for extra time, as you will need to gather contractors’ estimates. You will need to submit the estimates with your mortgage application. And, if you are approved, remember that the lender will release the money for the renovations to your lawyer. Once there has been a final inspection of the renovations, your lawyer will forward the payment to the contractor directly.