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Perfect (reno'd) home

How many times have you found a home in the perfect location, but it needs too much work as per the home inspection?

There is a great program available through most lenders that will allow you to add the costs of renovations to your purchase price, and finance them over the life of the mortgage. This program can also be used to update a home that is showing wear and tear. or has dated finishing.

Here are just a few advantages to using this program rather than using other sources of funds:

1)   If you have the money for the renovations, you can use this as part of the down payment and save on the insurance premium if you have less than 20% down.

2)   The payments on the renovations are amortized over 25 years, so the monthly cost is minimal compared to a personal loan.

3)   If the renovations are to be done within the first five years of ownership, chances are that there will not be enough equity to refinance during that time to complete the renovations, and legal & appraisal costs will need to be paid again.

4)   You can have all of the renovations done when you first move in before your belongings are unpacked.

There are two programs available:

The small renovation which is a maximum of 10% of the purchase price.

The draw renovation that is over 10% of the purchase price.  

The advantage of the first program is the ease of advancing funds and low costs. The purchaser is required to get an estimate for the renovations that they wish to do, and these are added to the purchase price for financing, then the minimum 5% downpayment is required based on the new cost. On closing, the money for the home is advanced and the balance of funds are held with a lawyer until the work has been completed. Once the work is completed, the lender will require paid invoices or an inspection from an appraiser before the funds are released to the purchaser.

The larger renovation is similar, but the cost of the renovations are held back by the lender and released as draws, which involve some increased legal costs. The property is appraised to determine the ‘as improved value’, and this value is used to determine the downpayment required.

Here are some of the renovations that can be included in the mortgage financing:

1)   Kitchen updated including flooring, counters and cupboards

2)   Flooring and painting

3)   Replacement of roof, hot water tank and furnace

4)   Adding a basement suite if legal or licensed

5)   Building a garage

6)   Replacing windows, doors and insulation

If you find a home you like but it needs renovations, make sure you ask about purchase plus improvements.  


For further information on this program or to find out if you would qualify please call 250.862.1806 or email [email protected]


Collateral mortgage

Most of the time I recommend that my clients not take a collateral type mortgage product, as it locks you in with the current lender and at maturity the mortgage is costly to transfer to another lender. However there is a circumstance when having a collateral charge makes sense.

Recently one of our lenders introduced a new mortgage and line of credit product that is probably the best on the market. This new product has a super low introductory price until the end of October on both the 5-year fixed rate and the 5-year variable rate. The product also comes with a low rate on the line of credit portion. The best part is that the line of credit limit automatically increases with every dollar you put down on the mortgage portion. This is a great product for the following people:

1.  Real estate investors that want to buy and sell properties. The line of credit can be used for the entire purchase or just the down payment, and is fully open so when the property is sold it can be paid off in full without penalty.

2.  Those homeowners wishing to convert their non tax deductible mortgage to something that allows them to deduct investment costs such as investing in stocks and bonds.

3.  Homeowners who want to have money for renovations or major purchases down the road but don’t want to be paying interest on the money now.


If you have an existing mortgage and line of credit combination please call 250 862 1806 or email [email protected] to see if I can save you money on your collateral mortgage.

Turn home equity to income

When retirement funds run low, seniors often ask if tapping into the equity in their home is the right way to retain financial independence. To see if this option might be a good fit for you, consider if you agree with the following statements:

  • Staying in my home is critical to the quality of my retirement lifestyle.
  • The idea of renting instead of owning a home bothers me.
  • My income consistently falls short of ongoing expenses.
  • I expect my retirement savings to run out within the next few years.
  • I am comfortable with using the value of my house to fund retirement.

If you answered mostly ‘yes’, take a look at a few more details about a reverse mortgage called the CHIP Home Income Plan from HomEquity Bank:

• If you have reached age 55, you may be eligible for CHIP. It lets you convert up to 50 per cent of the equity in your home into tax-free cash.

• Unlike other loans on the market, there are no credit or income qualifications and you are not required to service the interest, or repay the principal until you choose to move or sell.

• It is also guaranteed that you will never have to repay more than the fair market value of the house at the time of the sale.

When polled by the Brondesbury Group this year, 78 per cent of CHIP customers said they would recommend a reverse mortgage to others as a cash-flow solution. If you need more information please call 250 862 1806 or email mtggal@okanaganmortgages or visit out website at and click on the CHIP box.

Reverse mortgages

Do you know there is only one reverse mortgage provider in all of Canada?

Do you know they became a schedule one bank in late 2009?

Do you know how much the program has evolved and improved?

With nearly 30% of the Canadian population in retirement, and with over half of those retired still carrying debt, the Canadian Home Income Plan, provided by HomEquity Bank, is becoming a go-to solution for many senior homeowners. It is supported and encouraged by mortgage brokers, all major banks, many credit unions, numerous lawyers, financial planners, and more.

Why are there more people using and referring a reverse mortgage in Canada today than ever before in 29 years of business?

• Many senior homeowners have equity in their home, but have limited monthly income

• Traditional lending guidelines are strict, and many don’t have the income or credit to qualify

• The funds are completely tax free, helping to maximize tax efficiency and government supplements

• CHIP is simply a mortgage for homeowners age 55+ where making payments is optional and approval is easy

• Clients can access up to 50% of the value of their home in tax free cash, depending on their age and property type/location

• The money doesn’t have to be taken all at once. Simply advance funds as needed, and never worry about making a mortgage payment

• HomEquity Bank is paid back the principal and unpaid interest when the last applicant has left the home or they have sold

• Set up fees consist of only an appraisal and legal fees. There are no hidden or annual/renewal costs that keep adding to the balance

• Most current rates are between 3.95% and 5.49% depending on the term chosen

• Clients are guaranteed never to owe more than the fair market value of the home at the time it is sold

• Over time, the housing market tends to appreciate, and in most cases it has gone up in value as much or more than the CHIP balance has climbed, leaving lots of equity.

If you or maybe your parents are age 55+ and have equity in a house, townhouse, or condo, but are just finding things a little tight, or need access to a lump sum of money, CHIP might be the right solution.

Uses for CHIP:
  • Pay off your mortgage and get rid of the payment
  • Debt Consolidation
  • Access funds to renovate or travel
  • Access monthly cash flow to help cover expenses
  • Help Children
  • Estate Planning
  • Investment
  • Unexpected Life Events
  • Pay for in-home care costs
  • Or just to live a better retirement

If you would like more information on reverse mortgages and whether one might be right for you please call 250 862 1806 or email [email protected]

Read more The Mortgage Gal articles


About the author...

Laurie Baird is a Mortgage Broker with Verico Complete Mortgage Services. She has been in the mortgage business since 1991 and a broker since 1997. 

As a Mortgage Broker she is able to match her clients' needs with a lender who will provide them with competitive rates and products.

Laurie has a Bachelor of Education degree from UBC.

Contact Laurie at 250-862-1806 or visit:

Visit Laurie's blog at:

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.

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