Financial Literacy

Roll renovation costs into your mortgage with a purchase plus improvements – by Kimberly Curtis

April 20, 2021

When you’re looking for a new house, it can be hard to find a place that has exactly what you want. Sometimes a house may need a little TLC (a bathroom update, adding a fence, fixing a deck, etc.). The good news is renovation costs for your new home can be rolled into your mortgage. We call this a purchase plus improvement mortgage.


How does a purchase plus improvement mortgage work?


Step 1: Checking costs

1. get quotes 2. get appraisal 3. renovate 4. get paid

First, you will need to get price quotes that specifically states the work that needs to be done. If the cost of the home and improvements are within the pre-approved mortgage amount, then Sunova will move forward. If the purchase price and improvements are more than your pre-approval purchase price, we will review the mortgage approval to ensure you still qualify for the higher mortgage amount.


Step 2: Appraisal

An appraisal is needed to establish the value of the home. For purchases involving improvements, the property is assessed for the as-it sits value (the current market value of the property) and the as-improved value (the market value of the property after improvements).


n certain cases, you’ll need to complete the renovations before any ‘improvement’ funds are released. If this is the case, we can explore options to carry the costs, such as a line of credit.

Step 3: Move in and start working

Once you get possession of your new home, you can start the renovations. In certain cases, you’ll need to complete the renovations before any ‘improvement’ funds are released.  You may need a plan to carry the cost in advance of getting the funds covered (like a Sunova line of credit).


Step 4: Double checking the work + getting your money

Once you’ve completed the renovations, you’ll need another appraisal to confirm the

home’s improved value. When everything looks good after the progress inspection, available funds from the mortgage will be advanced to you.


With a purchase plus improvements mortgage, there are additional costs involved, such as the progress inspection fees and potential legal fees if a lawyer is responsible for disbursing the funds to contractors. We cannot include these costs in your mortgage, so you will need to budget for them separately.


Let’s connect


If you’d like to learn more about a purchase plus improvements mortgage or talk about your financial goals, I would love to meet with you.




About me

Hi, I’m Kimberly, one of the lenders at Sunova’s Oakbank branch. I am a mom with two grown-up boys, who now have homes and mortgages of their own… how time flies! I love spending time at my cottage in Ontario and reading on my dock while my husband fishes. I’ve been with Sunova for 12 years and love helping people with their financial goals, from getting a mortgage for their dream home to a loan to renovate a long-loved space.



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