This program is excellent if you are looking to do some renovations on your new home purchase. Purchase plus improvements allows you to renovate the kitchen, install a new furnace or central air system, possibly your dream home is perfect except the roof is in dire need of repair.
It is really important for Realtors to be aware of as well. Their clients found the perfect home but the kitchen is 25 years old, you can still make the deal work. In this case it is really important to have a mortgage broker on their side that really knows how to put deals together.
So let's just say that you found the perfect home but you need a new kitchen. Let your mortgage broker know that you want to do purchase plus improvements. This does not change your pre-approval as long as you qualify for the extra amount. Here is a brief step by step of the process.
- Put in your offer and get it accepted.
- During your 5 days you have to get financing approved. Inform your broker that you want purchase plus improvements when you hand him/her your offer.
- Get a quote ASAP to give to your broker for the work you want done from a licensed contractor. (Some lenders may want 2 or 3 quotes).
- An appraiser will go to check the work you have requested and send their report to the broker or lender.
- You get your approval for the purchase plus improvements.
- On closing your lawyer will hold back the extra funds required for the improvements you want done.
- Have your contractor complete the work and once it is done the appraiser will return and verify the improvements are completed, then at this point the lawyer will release the extra funds to you.
This program is really handy if you find your perfect home but just need a couple things updated. If this is for you feel free to get a hold of me and I will see what we can do.