You've found a home in the right location, with the right layout and enough potential to make it your own. The problem is the kitchen, flooring or bathroom needs attention, and using your remaining savings for renovations would leave you stretched. A purchase-plus-improvements mortgage may help eligible buyers finance the purchase and approved improvements together.
The basic idea
Instead of arranging the mortgage around the purchase alone, the lender considers eligible improvements and the property's accepted value once they're complete. Financing remains subject to your qualification, the required down payment and the program's limits. It can be a way to plan certain renovations as part of the original purchase.
What might qualify
Depending on the program, eligible work can include kitchen cabinets, counters, flooring, bathroom updates or windows. Scope matters — cosmetic improvements and major structural work aren't necessarily treated the same, and some programs exclude additions, structural repairs or work needed to make an uninhabitable property livable.
The important cash-flow detail
Approval for renovation financing doesn't necessarily mean the money is handed to you on closing day. Improvement funds may be held back until the work is completed and verified, so you need a workable plan for paying contractor deposits and other costs before those funds are released. That's one of the most important details to clarify upfront.
Before committing to the property or the renovations, send CD Mortgages the listing and a summary of the planned improvements.