01. Quotes lined up before you firm up.
So financing is a condition you can actually satisfy.
Buy the fixer-upper. Finance the fix.
A purchase plus improvements mortgage adds renovation money to your purchase mortgage, based on what the home will be worth after the work. Your down payment is the same percentage, just on the higher total. The reno money is held in trust by your lawyer and released once the work is done and checked. It suits dated kitchens, flooring, windows, a roof, or finishing a basement.
So financing is a condition you can actually satisfy.
The appraisal has to support the finished value, so we sanity-check it early.
You usually pay contractors before the money releases. We plan for that gap.
Some lenders make this painful. I use the ones that don't.
Upgrades and repairs qualify. Furniture and most additions don't.
Most lenders want the work finished within a set window after closing, often around 90 days.
$350,000 purchase plus $30,000 of renovations = a $380,000 total. With 5% down, that's $19,000 instead of $17,500. If you put less than 20% down, the mortgage insurance premium is added to the mortgage.
For realtors: buyers who can't picture the home can finance the fix. Write the financing condition, send me the quotes, and I'll handle the rest.
“The house that needs work is often the best deal on the street. The trick is lining up the money before you firm up the offer, not after.”- Jeremy LaHaie
Limits vary by lender. Many cap it around 10% of the home's after-reno value. Bigger projects are possible with the right lender and staged payouts.
After the work is done and verified. Plan to cover the contractor up front or agree on terms.
Improvements that add value: kitchens, bathrooms, flooring, windows, roofs, basement finishing. Furniture usually doesn't.
Yes, on an insured mortgage. The down payment is calculated on the price plus the reno cost.
Most lenders want professional quotes and won't pay you for your own labour.
The overrun is on you. Build a 10 to 15% buffer into your plan.