Purchase Plus Improvements Financing Seminar.

1. Purchase Plus Improvements Financing Seminar. “You Love The House, But……!!!”

2. Introduction • I would like to take the opportunity to thank you for taking the time to view this very special presentation. • I am one of the only mortgage specialists who has chosen to specialize in this financing area. • Not many people are even aware this program exists.

3. Introduction • This seminar will touch on the following subjects: What is Purchase Plus Improvements ? How does it Work ? This Seminar Who to contact for the Renovations Example of an actual deal

4. What is Purchase Plus Improvements • As the homes in Burlington and the surrounding area, are getting older, more and more are in need of some sort of repair. • A house might need new windows, new furnace, or even new carpeting. • There is a very narrow window of opportunity which would allow a purchaser to roll the costs of those renovations into the new mortgage.

5. What is Purchase Plus Improvements • Even if you are a first time homebuyer buying a home with 5% down, you can take part in this program. • When you are out looking for that perfect home, in that perfect neighborhood, please keep this program in mind.

6. What is Purchase Plus Improvements • The following are items that could be included in the improvements. • Roofs • Windows and Doors • Driveways • Garage Doors • Fencing and Decks • Furnace and Air Conditioning • Flooring,(Carpeting, Hardwood and Ceramics) • Kitchen and Bathroom Remodeling • General Contracting and more.

7. What is Purchase Plus Improvements • Instead of telling your realtor “I love the house but…. “, buy that house in the condition that it is in, usually for a lower price, and fix it up. • The older homes have more charm and lets face it, much larger properties. Don’t settle for a new 32 X 100’ lot, when you could by an older home with a 60 X 120’ lot for the same price. You would also benefit from mature trees and landscaping in an older property.

8. What is Purchase Plus Improvements • I have personally used this program for the last house I bought. After seeing how simple it was, I question why more people don’t benefit from this program.

9. How does it work ? • STEP 1 • Before you submit your offer, you should have your mortgage pre-approved, to establish your maximum financing limit. If the renovations will push your mortgage requirements above your limit then this may not be a viable option. • If you would like to discuss a pre-approved mortgage, please email me @ dkendall9@on.aibn.com

10. How does it work ? • STEP 2 • Submit your offer with your Real Estate agent, but make sure your offer is “Conditional on Financing”, because until you know the cost of the renovations it is difficult to decide if you want to buy the house. • Also have your agent input a “Re-Visit Clause” in your offer, this will allow the contractors to enter the house generally with 24 hours notice, to provide a written estimate for the work that needs to be done while your deal is conditional.

11. How does it work ? • STEP 3 • Before you finalize your offer, try to set your new closing date 1 week before you need to move out of your current home. If you have a home to sell, you will require bridge financing. It is not as expensive as most people think and this will allow the renovator time to complete the renovations in an empty house. Much less disruptive at moving time as well. • If you require information about bridge financing, click below to email me at dkendall9@on.aibn.com

12. How does it work ? • STEP 4 • Contact the contractor(s) to get the written estimates for the work that needs to be done. • Have them call your Real Estate Agent, to set up a time so they can get in the house. This also needs to be done, ASAP, because these estimates are needed to get the increased mortgage approved.

13. How does it work ? • STEP 5 • When I submit your mortgage, I increase the purchase price of the home by the cost of the renovations. We then finance, based on the higher price. • Now, I can not guarantee that CMHC or the lending institution will always accept the renovations, at a dollar for dollar increase. • However as long as the amount is reasonable for the work being done, and you are not increasing the price of the house beyond a marketable value, they will usually approve the total increase.

14. How does it work ? • STEP 6 • Once the mortgage is approved: • Contact your Real Estate agent and waive your financing condition. • Contact the contractor to set a date to complete the renovations. If you managed to have the one week over lap in closing dates, that should be when the work is completed.

15. How does it work ? • STEP 7 • When we advance your mortgage on closing, what will happen is, the monies intended for the renovations will be “Held Back” by your solicitor, until confirmation that the work is completed. Once confirmation is received then the monies are released by your lawyer to you… • You then pay your contractor.

16. How does it work ? • RECAP • This sounds a little complicated, but I have tried to cover all aspects in detail. • The basics of this program is that you submit the cost of the renovations at the same time you are getting your mortgage approved, we increase the value, and you have now bought a “Perfect” house in the condition you want it.

17. How does it work ? • RECAP • I added a few steps, from mistakes I made personally. • We had all new carpeting installed throughout the upstairs. We did not bridge for the week. • This meant when we were moving in, all the upstairs furniture had to go in the garage, until the carpeting was installed. Not very convenient.

18. Example of an Actual Deal • A client saw a house that needed a new garage door, new flooring in the kitchen and main floor bath, and the carpet throughout the upstairs was very worn and outdated. • Why would any one want to buy this house ? • The price was right, it was in a great neighborhood and had a great size lot. • They loved the house but …………

19. Example of an Actual Deal • The original price of this house was $200,000 • They submitted the conditional offer at $195,000, and the deal was accepted. • The renovations cost $8000.00 in total . • The client only wanted to put 10% down. • So the deal was set up as follows:

20. Example of an Actual Deal • Original Purchase Price $195,000 • Renovations $ 8,000 • Revised Purchase Price $203,000 • Down payment $20,300 (10% down) • Mortgage $182,700 • CMHC Fee (2.0%) $ 3,654 • Total Mortgage $186,354

21. Mortgage payment for the renovated home. $186,354 Mortgage at 7.25% (sample rate only) 25 year mortgage. $1334.14 Mortgage payment for non – renovated home $179,887 Mortgage at 7.25% (sample rate only) 25 year amortization. 1287.84 Example of an Actual Deal

22. Example of an Actual Deal • So as you can see the $8000 in renovations ended up costing $46.30 per month as an increase to the mortgage payment. • Every $1000 in renovations costs approx $7.16 per month. (Based on 7.25% sample rate)

23. Example of an Actual Deal • Now some skeptics out there will say, by amortizing the renovations into the mortgage, you are paying a lot of money over 25 years. • I don’t disagree with that statement, however, if the house already had those renovations done, you would have had to pay a higher price for it anyways. • A small price to pay for the new carpets, new ceramics, and new garage door. • You also would not have had the opportunity to pick the colours, style, or quality of the items being renovated.

24. How Burlington Home Buyers.com will implement the purchase plus Improvement program. • The reason why more people have not used this program before is that it requires the co-operation of numerous individuals. • Burlington Home Buyers.Com covers every possible area involving the transaction of buying a home. • Each individual who has elected to advertise on this site has had the purchase plus improvement program explained in great detail, and understand their role in this transaction.

25. How Burlington Home Buyers.com will implement the purchase plus Improvement program. • The “Buying a Home” section, has brought together the web site of numerous of Burlington’s top real estate agents, as well as a easy way to search for homes on the internet. • We have also provided a mapping link which will help you locate exactly where a home is once you know the address.

26. How Burlington Home Buyers.com will implement the purchase plus Improvement program. • The “Buying a Home” section also provides links to some of most active Real Estate Lawyers, Home Inspectors, and Home Insurance agents in Burlington. • I have also provided a link to my own web site for mortgage financing which also contains a 52 page presentation for 1st time home buyers as well as, mortgage rates, rate guarantees, a payment calculator and a economic update.

27. How Burlington Home Buyers.com will implement the purchase plus Improvement program. • If you would like to link to the Buying a Home section, just click below • Buying a Home Section • For information about the Renovation and Repair section , continue with this presentation.

28. Who to Contact for the Renovations ? • I was amazed to find out that most of the renovators were also not aware of this financing program either. • It can be difficult to explain to renovators that they will be paid from the mortgage proceeds, once the work is done.

29. Who to Contact for the Renovations ? • BurlingtonHomeBuyers.com will help you choose a renovator. • Now please be advised that I personally do not endorse the work of any of the renovators listed on this site*, but I have explained the Purchase Plus Improvements Program in depth to each company that has chosen to advertise on “BurlingtonHomeBuyers.com” • *(I need to state this for liability purposes.)

30. Who to Contact for the Renovations ? • To see advertisements and web sites of local renovators please click on the link below. http://www.burlingtonhomebuyers.com/ • Thank you for taking the time to view my seminar. If you would like any additional information about this program, or please email me at dkendall9@on.aibn.com/ • Or call me at 1-905-336-8448, ask for Dave Kendall, Mortgage Specialist, Mortgage Financial Corporation.

31. To Exit The Presentation • Please feel free to complete “Online Seminar Survey” located at the Online Seminars section of Burlington Homebuyers. Com. • To leave this presentation, just click on the “X” located on the top right hand corner of this window.