Imagine finding the almost perfect space to buy; it’s the ideal location and the perfect size. You love everything, but the outdated bathroom or maybe the roof needs to be changed. Well, these issues no longer have to stop the sale. Get a purchase plus improvement mortgage and move forward in your dream life.
Purchasing a new home is always an exciting time, yet it can also be a TON of work. And sometimes, there is even more work to do when talking about a remodel. Therefore, the best thing to look into is getting a purchase plus improvement mortgage with LeSolace to get it all done right off the bat.
Bundle up the renovation cost with the mortgage payment to keep it organized and easy to keep track of every month. Include the cost of the renovations with your new mortgage and move into your dream space! You get to make your new property how you desire.
What is a purchase plus improvement mortgage?
A purchase plus improvement mortgage is when the lender lets you borrow additional money in addition to what you borrow for the mortgage. This extra cash is to help you make the space move-in ready. This type of mortgage makes it easy to make your monthly payments since it is a two-in-one kind of deal!
Once you sign their contract and close on your home, you will have the necessary resources to make your desired upgrades. Not every home is a turnkey property. The lender must agree that the improvements will increase the home’s value, giving you a revised mortgage amount for this type of deal to go through.
We usually lend out $50,000 – $200,000. Yet, in some cases, an appraiser can come out and decide if more money is available for your remodel. It is necessary to evaluate the project to ensure it will add value to the property. The key is to make the property worth more; then, the renovations get approved.
Affordable Financing Every Time
Purchase plus improvements mortgages are perfect when you find a property, yet it needs some work before being move-in ready. These mortgages usually require between 5 – 10% as a downpayment. Pay the loan back in affordable monthly payments for as long as the contract.
Mortgages are generally 15 to 30 years, often given in increments of 5 years.
There is one big thing to consider. The lender pays back the renovation part of the mortgage once the work is 100% done! Therefore, you must make a deal with the contractor and agree to payment after the work is completed, or put up the money and get reimbursed. Sometimes, a deposit is needed before starting, but it all depends on your contractor. Some contractors might accept a letter from the bank confirming the deal.
Popular Remodels to do with a Purchase Plus Improvements Mortgage
So what type of renovation should you complete? The following are some of the most common home renovations in the USA.
- gutting a kitchen or bathroom for a total redo
- kitchen counter and cabinets
- flooring- tiling/carpeting/wood
- bathroom upgrade
- addition of a master bedroom
So how much is a renovation? Bathroom remodels can cost from $9,000 to $60,000. A mid-range kitchen remodel can come in at over $60,000. And then there are always upscale versions of the midrange options. However, upscale prices aren’t usually in play with this type of mortgage when talking about a $40,000 remodel.
Renovations don’t end with the list above. Here are some other ways to upgrade your house.
- new doors and windows
- finishing the basement
- fencing and deck/patio
What Isn’t Recommended for a Purchase Plus Improvement Mortgage
When you get a purchase plus improvement mortgage, a prerequisite is to up the property’s value. The following upgrades don’t usually add a good market value to the home and are therefore not usually accepted.
- hot tubs
- swimming pools
Work with us!
If you are looking for a new house and you love the location and neighborhood, but the house needs some sprucing up, a purchase plus improvement mortgage is precisely what you need. Come to us at LeSolace for help. We put lend + solace together! Allow peace to flow when talking about mortgages.
A mortgage and loan shouldn’t feel like a burden. What you think is a choice! Work with us, and we will help you!
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