Buy a house that requires renovations can be a long-term exciting project, but at
level of funding, would it not be better to to realize this project in the short term?
In recent years, the maximum amount allowed during a Refinancing mortgage loan is set at 80% of the value merchant of the property.
In the past, consumers who have given a minimum of down payment could use the accumulated equity value
of their property to carry out renovations while
the allowable limit was 95%. Today, the slowdown
the progression of values, combined with the 80% rule, limits the
possibility for borrowers to use value appreciation
of their property for the purpose of renovations.
So what to do?
Do the work as soon as you buy the property.
Mortgage insurers and fnancial institutions
now allow to get, when buying a property,
a mortgage on its future value according to the work at
carry out. The borrower can therefore acquire a property and
proceed immediately with the desired renovations, while
including the cost of the work in the mortgage loan. The
Advantages of this type of loan are many:
• Renovation work done upon purchase;
• Initial cost for the borrower limited to 5% of the required amount
for these works;
• Spread of the cost of the work according to the period
amortization of the mortgage loan;
• Advantageous rate.
The alternative loan
You are self-employed, you have an excellent record
credit, but your reported income is less than that required by
your bank, then you are not able to get a loan from
refnancing to invest in your business?
Your credit report is tainted due to delays
situations such as illness or the loss of a life
employment; your project to buy a property is given in question ?
In both cases, consult a mortgage broker. This one
will be able to refer you to an alternative lender for so
allow you to realize your projects.
What is an alternative mortgage?
This is a mortgage loan with an interest rate of
little increase depending on the risk. For a person whose
credit has been slightly altered, it will probably be
temporary solution, with a term of one or two years,
which will allow the reestablishment of the credit rating. The folder
may then be submitted to a mortgage lender offering
more competitive rates.
For a self-employed worker, it may be more advantageous
to keep such a long-term loan because the cost in interest
The annual cost may be much lower than the cost
increase in reported income.