Have you ever said "what a beautiful home with a great piece of property, too bad the kitchen is outdated?
Well you are in luck. There is a program that not only opens the door for you to get into the home, with the dream kitchen, or spa like ensuite, but it also saves you any inconvenience, or hassles of arranging a second loan after the closing. This program is available with Genworth or CMHC "Purchase Plus Improvements" mortgage.
Now you can purchase a home, renovate it the way you like and pay for it all in one mortgage payment at first mortgage rates. All of this can be done by putting down as little as 5% of the "as improved" value.
For example, if you purchased a home for $120,000 and wanted to do $30,000 worth of renovations, Gentorth/CMHC will insure a mortgage based on 95% of the "as improved" value. In other words, with a down payment of $7,500 (5%) GenworthICMHC will insure a mortgage of $142,500. The key for this working is that the cost of the renovations has to be reflected in the "as improved" value of the house.
In this example, Genworth/CMHC would have to agree that the house would have a value of at least $150,000 after the $30,000 worth of proposed renovations was done. The insured loan will be based on the lower of the purchase price plus the actual cost of improvements or the "as improved" market value.