If you are purchasing or refinancing your home and want to make improvements – a Purchase or Refinance PLUS Mortgage may be what you are looking for. This option allows the renovation costs to be added to the mortgage therefore benefiting from a low mortgage interest rate and making only one payment.
Down payment requirements are based on the as improved value. The as-improved value is used to determine maximum loan amount (maximum LTV varies by product and number of units). Depending on the lender or insurer, the total cost of the itemized improvements cannot exceed either a dollar amount or percentage of the initial or improved value.
A detailed list of the improvements, including quotes outlining the scope of the work and cost estimates are submitted along with the mortgage application to the lender. Depending on the amount of the renovation costs, the lender can advance funds with confirmation of completed work. At that time the funds are released to your solicitor. That means that you will have to pay for the renovations yourself until the work is completed.
Contact me for more information about a Purchase or Refinance PLUS Mortgage.