Bought a dump? Need to do renos? Don’t have the money?

I’ve got the answer for you. It’s a rarely-used but great program called “Purchase Plus Improvements”. Let me explain using a real-life case I just did for my clients.

Maddy and Miguel just bought a fixer-upper for $329,900. And when I say “fixer-upper” I do mean fixer-upper. However the bones of the house were solid and the home was very well maintained. Using CMHC’s “PPI” program, they could add up to 10% of the original sale price of the home in improvements, and finance the project right away. However, a major caveat is that the work has to be done via registered contractors AND it must all be paid up front as the lawyer holds back the 10% extra funds. One creative solution was to go to a major home renovation centre and put the project on a 6-month no payment financing plan.

So that’s what they did!

Here’s how the numbers break down:

Purchase price $329 900.00
As-improved value $32, 900 + $329, 000 = $361, 900.
Clients finance 95% of the as-improved value from the get-go, and have a first mortgage of $343, 805 PLUS standard cmhc insurance of 2.95%.
Legal side holds the 10% as-improved monies back, while clients went to Home Depot, got estimates, and applied for (and were approved for) the 6-month no payments plan.
Once the work is completed, all invoices are submitted back to original lender and a CMHC appraiser goes out to inspect the property, clients get the 10% released and can pay Home Depot back thus carrying no further debt than they need to.

It really is a great program and both CMHC and Genworth participate in it. Here’s a link to Genworth’s version: http://www.genworth.ca/content/genworth/ca/en/products/features/purchase_plus.html and CMHC’s version http://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Improvement.pdf for your info.

Contact me today…


Now Is The Time..

I’m not much of a pushy sales guy. If a client wants to go the opposite route of my advice, or heck even doesn’t want to work with me, then I don’t push and prod and force the issue. I also don’t prey on people’s fears when trying to sell my service to them. Lately there’s been lots of talk about an impending change in our real estate market, be it in the short- or mid-terms, and specifically regarding house prices, a topic seemingly on everybody’s mind these days. You can’t throw a rock and not hit someone talking about house prices. Internet forums and threads dedicated to house prices. Blogs and online tweets about? you guessed it, house prices. I won’t begin to pretend I’m an expert on our real estate market in the GTA because I don’t even believe the self-proclaimed experts are experts. If we knew, we’d be much richer than we all are. That being said, IF you’re thinking your unsecured debt is getting the better of you, now is the time to consider refinancing. Some people get scared of the idea of a refinance because they think they can manage to pay off the 9%, 19% or even 29% loans that they’ve taken on, or are fearful that their mortgage balance will be higher, or are simply ashamed they got into that much debt. Whatever the reason, BEFORE house prices take a tumble (if they do, that is), you can refinance up to 85% of the value of your home towards paying off that unsecured debt, and having one single payment per month. Did you know at today’s low interest rates about 40% of your monthly payment goes towards principal anyways? Think of it this way: if ANY of your debt is at or above…


You Think Your Bank Loves You?

I love being called into action when clients get turned down by their banks for no apparent or logical reason. Love it because I get the business, and I also show people that running to their branch is not always the best course of action. In case #1 a first-time buyer couple had an absolutely amazing credit history of 820+ on both their scores. Their down payment was 5%, but, they diligently saved another 5% in their account for “in case” emergencies (which is rare!). They both worked full-time and their “GDS/TDS” qualifying ratios were 10% under, which gave them lots of breathing room. Here’s where it got wierd: their bank pre-approved them for the special of 2.99% 4year fixed, BUT, at $340,000. Problem was my clients needed to be pre-approved for $5,000 more. So when they made an offer and sent it to the bank rep, they were told:

“Sorry, because your pre-approval stated $340,000, you will now lose the rate and get the new, higher rate”.

Over $5,000.

And, to top it off, even though rates went up in most places, I got them .10 off what they were given, before rates went up.

Client #2 was buying an investment property with 20% down. He waited 4 days (!!) to get a call back from his mortgage rep at his bank, and finally today was fed up and made a complaint to the manager. Supposedly hidden deep in fine print it said that their 2.99 offer was only for principal residence properties, and as such they would need to go through the rigamarole of adding their father-in-law to the deal. Great, more complexity. Client #2 called me at 530pm with a 9pm condition of financing. I managed to offer them .2 better on a 3-year rate, got…

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