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Hey there, time traveller!
This article was published 25/08/2023 (944 days ago), so information in it may no longer be current.

Set the scene: you are house shopping and come across the perfect home. It’s the right size, the right neighbourhood, mature trees, a large lot — but it has an outdated kitchen. You don’t have to let this gem go because of that 70s tile floor. A Purchase Plus Improvements Mortgage makes it easy to finance the purchase of your home and any renovations in one simple transaction. You get one manageable payment that gives you your dream home without having to wait to afford renovations later.

It’s easy, affordable, and more cost-effective than a higher-rate loan.

How it works: You purchase a home for $275,000 and you need $30,000 for renovations. If you didn’t take advantage of the Purchase Plus Improvements Mortgage, your mortgage could look something like this:

Purchase Price                                                                              $275,000

5% down                                                                                        $13,750

Base Mortgage amount                                                              $261,250

Insurance Premium (Base Mortgage x 4%)                           $10,450

Monthly Payment                                                                $1,610

Total Mortgage                                                                            $271,700

If you add the $30,000 as Purchase Plus Improvements, it will look something like this:

Purchase Price + Improvements ($275K + $30K)                 $305,000

5% down                                                                                        $15,250

Base Mortgage Amount                                                             $289,750

Insurance Premium (Base Mortgage x4%)                            $11,590

Monthly Payment                                                                $1,785

Total Mortgage                                                                            $301,340

These calculations are for illustrative purposes only and Access Credit Union does not guarantee similar results. Please speak to your mortgage lender for a more comprehensive plan to help you buy a new home.

The cost to add the renovations upfront adds only $175 to the monthly payment and only $1,500 to the down payment. It’s easy, affordable, and more cost-effective than a higher-rate loan and best of all you can start those renovations on the possession date.

Bonus Tip: If the home needs a little more work than you initially thought, focus on the improvement projects that will offer the biggest payback in terms of resale value:

1. Kitchen: The kitchen is the heart of the home and one of the most important rooms in relation to the value of your home.
2. Bathroom: You want your bathroom to be a relaxing retreat. Plus, adding even a half bath to a one-bathroom home adds substantial value.
3. Flooring: Getting rid of old, damaged tile or dated shag carpet makes a huge impact on a home’s value and esthetic. If you’re lucky, there might even be hardwood hiding under that carpet!
4. Updated Fixtures: Replacing unattractive lighting, doorknobs, cabinet hardware, and any other fixtures can quickly update the look of your home and create a fresh new look.
5. Windows & Doors: Not only does changing out windows and doors update the appearance of your home, but this improvement also increases energy efficiency, resulting in lower annual hydro bills.

All it takes is a little TLC to turn that fixer-upper into your dream home—and through a Purchase Plus Improvements Mortgage, you can make that happen! Contact Access Credit Union today about getting a Purchase Plus Improvements Mortgage.

Learn more at accesscu.ca.