Purchase With Improvements | The Mortgage Advisors

Purchase Plus Improvements mortgages are for consumers looking to buy a home that has great potential but needs renovation or updating. The program enables buyers to complete improvement projects immediately after taking possession of their new home, with renovation costs rolled into one easy-to-manage mortgage. The idea is that immediately renovating your home adds to its market value, and the mortgage amount is based on that new and improved value. It’s a great way to purchase a home AND ensure that the home is up-to-date and in good repair.

Let’s See Purchase Plus Improvements In Action

You’ve found a home you love in a perfect neighbourhood, but the property shows some signs of age. You would like to upgrade the kitchen countertops, repair the roof, replace the picture window in the living room, and paint the walls and trim. The total cost of these upgrades is $30,000.

$300,000 (PURCHASE PRICE) + $30,000 (UPGRADES) = $330,000 (NEW IMPROVED VALUE)

$330,000 (NEW VALUE) – $16,500 (5% DOWN PAYMENT) = $313,500 (MORTGAGE AMOUNT)

Why Purchase With Improvements is a Smart Option

If you are looking to complete renovations without taking on high-interest debt, a Purchase Plus Improvements mortgage may be one of the smartest paths forward. Instead of juggling a credit card balance or a personal loan, renovation funding becomes part of the mortgage at a much lower interest rate.

And although many people assume the rate might change when renovation funds are added, it doesn’t. The improvement amount is included in the same mortgage, with the same rate you were approved for. That stability alone can make the planning process easier during a time when buyers already have enough to think about.

What’s more, when upgrades are completed right after you take possession (especially value-adding upgrades such as replacing older windows, updating a tired kitchen layout, or repairing structural issues), the property’s market value often increases right away.

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What Types of Improvements Typically Qualify

Not every renovation automatically fits within the Purchase Plus Improvements mortgage requirements:

Structural repairs and safety-related upgrades almost always qualify. That includes roof repairs, foundation work, electrical updates, and anything to address water issues.
Energy-efficient upgrades are also usually approved because they reduce operating costs and increase the home’s market value.
Cosmetic-only improvements are sometimes approved, but lenders typically require evidence that the work will add measurable value. Repainting alone might not qualify unless it’s part of a broader renovation.

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Step-by-Step Process

Step 1: Pre-Approval and Budget Planning

Before you begin house hunting, your mortgage broker will help you understand how much room there is in your budget for both the purchase price and the improvements. This avoids the common situation where buyers pick a home only to discover later that the renovation funds they need won’t fit into their mortgage approval.

Step 2: Finding the Right Property

Many buyers look specifically for properties with solid bones (like a good layout, strong structure, and a neighbourhood they feel confident in) but that need work. Your mortgage broker can help you assess whether the renovations you have in mind are likely to qualify and roughly how much value they may add after completion.

Step 3: Collecting Contractor Quotes

Lenders rely on detailed quotes to determine the home’s projected value after improvements. The quote should include materials, labour, expected timelines, and the contractor’s full contact details. Choosing a contractor with experience in submitting mortgage quotes can make the process smoother. Overestimating may prompt the lender to push back, while underestimating can leave you short later, so it’s wise to request at least two quotes when possible.

Step 4: Revising the Mortgage Approval

Once the quote is submitted, the lender adds the improvement costs to your mortgage approval. They calculate the mortgage amount using the estimated post-renovation value, not the original purchase price. This is why the appraisal stage is so important: the appraiser needs to agree that the finished home would reasonably reflect the projected value. If adjustments are needed, the lender will outline them before final approval.

Step 5: Closing Day and Starting Renovations

On closing day, your lawyer receives the mortgage funds, but the renovation amount is withheld until the work is complete. This is done to protect the lender and ensure that the agreed-upon renovation work is actually completed. Most of the time, you will have about 90 days to implement the improvements.

Step 6: Post-Renovation Inspection and Fund Release

Once the renovations are finished, an appraiser returns to confirm the work was completed as quoted. They verify that the improvements align with the original scope, that quality is appropriate, and that the home reflects the updated value. If the inspection report is approved, the lender releases the funds that have been held back. Homeowners can then pay their contractor in full.

Things Buyers Should Keep in Mind

Stick to the plan. Renovations must be carried out exactly as described in the approved quote.
Don’t expect the funds until the work is completed. Improvement funds are released only upon completion of the work, so it’s important to plan cash flow carefully during the renovation period.
Stay close to the timeline. Most lenders expect the work to be completed within 90 days; adhere to the timeline to ensure you receive the funds on time.
Choose the right type of improvements. While cosmetic upgrades are appealing, improvements that clearly increase the home’s value are more likely to get approved.
Work with a mortgage broker. Working with a brokerage that understands Purchase Plus Improvements mortgages can make the entire experience more manageable.

Advantages of Working With The Mortgage Advisors

At The Mortgage Advisors, our goal is to support homeowners throughout the entire home renovation mortgage process, from the early planning stages through to the final inspection. We answer questions, flag potential issues, and offer guidance grounded in experience rather than guesswork. Clear communication and reliability are at the centre of how we work, and many clients appreciate having a broker who stays involved well past the mortgage approval.

If you are ready to explore a Purchase Plus Improvements mortgage or want help deciding whether it’s the right fit, don’t hesitate to give us a call. We will be happy to go over your options and help you choose what makes the most sense for your situation.

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Purchase Plus Improvements Mortgage

Let’s See Purchase Plus Improvements In Action

Why Purchase With Improvements is a Smart Option

What Types of Improvements Typically Qualify