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Monthly Archives: September 2011

What Purchase Plus Improvements Are

Purchase Plus Improvements (definition as we see it): When a client is purchasing a home and wants to add cosmetic changes through a renovation process using funds advanced by (the lender) to complete and pay for the renovations.

How it Works:  The client finds their dream home and enters a contract to purchase this home, but decides that part of the home (maybe the carpets or kitchen cabinets) need to be updated. Once the purchase contract is in place, the client needs to obtain quote(s) on the work to be completed. The quote(s) should be obtained from a reputable contractor or well known company and should be written professionally on letterhead including labor and material costs in an itemized fashion making review simpler. We are lenders and not contractors or material specialists, so the clearer and easier to read the quote(s), the faster we can respond and approve them. Once the quote(s) submitted are reviewed and approved we convert the purchase file to a purchase plus improvements file by adding specific conditions to mitigate the unique risks involved in this type of application. The mortgage must be insured and we are required to update the insurer with the new numbers along with renovation information and need to adjust mortgage amounts and required down payment for accuracy. Once we have the file approved and all broker conditions met, we advance the entire mortgage amount to the lawyers and condition for a holdback equivalent to the renovation cost.

 
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Posted by on September 30, 2011 in Uncategorized

 

Loan To Value

What is loan to value?

When purchasing your first home you will need to consider your loan to value (LTV).  The loan to value of your mortgage is a simple ratio calculation.  You can find your LTV by taking your mortgage amount and divide it by the purchase price of your home. LTV = Mortgage/Purchase Price.  The higher loan to value, the higher the CMHC premium.  If the LTV is 80% or less, you avoid the CMHC premium.

 
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Posted by on September 30, 2011 in Uncategorized

 

Housing starts expected to remain steady

Housing starts expected to remain steady
Housing starts increased strongly in the 2nd quarter of 2011 and will moderate in coming months. Find out more in the Third Quarter edition of CMHC’s Housing Market Outlook — Canada Highlights.

 
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Posted by on September 30, 2011 in Uncategorized

 

Down Payment Options

As many know you are required to have a minimum down payment of at least 5 %.  This down payment can come from many sources such as a gift, savings, line of credit, credit card or a cash back from a lender.  Each option has certain criteria in order to move forward whether that is credit or GDS and TDS ratios.  For those without there own savings or the option to borrow the money, the cash back program is a great option, especially for those currently renting.  If you have a goal of becoming a home owner, this might be a great option for you.

 
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Posted by on September 29, 2011 in Uncategorized

 

Down Payment Options

As many know you are required to have a minimum down payment of at least 5 %.  This down payment can come from many sources such as a gift, savings, line of credit, credit card or a cash back from a lender.  Each option has certain criteria in order to move forward whether that is credit or GDS and TDS ratios.  For those without there own savings or the option to borrow the money, the cash back program is a great option, especially for those currently renting.  If you have a goal of becoming a home owner, this might be a great option for you.

 
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Posted by on September 29, 2011 in Uncategorized