Buy & Renovate With One Mortgage

A Purchase Plus Improvements Mortgage is a practical option for buyers considering homes that need renovations. Instead of passing on a property because it isn’t move-in ready, this program allows renovation costs to be included in the mortgage. With as little as 5% down, financing is available for up to 20% of the post-renovation value of the home.

Here’s how the process works:

Step 1: Get Pre-Approved

Before starting the home search, a mortgage broker will assess how much financing is available, including funds for renovations. This helps define the total budget from the beginning.

Step 2: Find a Home & Get Quotes

Once a property is selected, the next step is to gather written estimates from contractors. These quotes need to clearly outline the work being planned and the associated costs. The total of the purchase price and the renovation budget must fall within the approved mortgage amount.

Step 3: Submit for Approval

After the offer is accepted, both the purchase agreement and the renovation quotes are submitted to the mortgage broker. The lender then reviews and approves the full amount, which includes the renovation portion.

Step 4: Complete the Work

On closing day, the mortgage funds for the home are released, but the renovation funds are held back by the lender. Those funds remain in trust until the work is finished.

Step 5: Final Inspection & Fund Release

Once renovations are complete, an appraiser confirms that the work was done as quoted. Once verified, the lender releases the improvement funds to cover the costs.

This type of mortgage can offer more flexibility in the home search and make it possible to purchase in areas where updated homes may be outside the budget. It’s also a way to personalize a space right from the start without needing additional financing or dipping into savings.

I put together a short video that breaks it all down step-by-step

Watch it here