Although the kitchen, the bathrooms as well as the floors are rarely to our taste when we visit houses for sale, is this a reason to reject a house that has many other assets?
The CMHC purchase-renovation program, growing in popularity, is even necessary in certain renovation situations since the change in mortgage lending rules. It is now impossible to borrow more than 80% of the value of the property. Thus, refinancing after doing the renovations will definitely not free up enough liquidity to cover all the costs of the renovations, in spite of the subsequent increase in value of the property. In sum, the cost of renovations to undertake is added to the purchase cost, and the required down payment percentage is then calculated on these two amounts. For example, the house costs $300,000 and the kitchen renovations $30,000; the minimal 5% down payment will be calculated on a total of $330,000. You will receive the $ 30,000 for the kitchen renovations once the renovations have been completed.
So, think about it: why not purchase a reasonably priced property that may not be perfect and make it perfect if it is in a neighbourhood you like ?
Or, why finance the renovations on your new property with a loan, a bank line of credit or a credit card, all of which have higher interest rates than a mortgage?
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