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>> Reporter: FRANCIS SILVAGIO,
GLOBAL NEWS, CALGARY.
[ ♪♪ ]
>> Kevin: WELCOME TO MORTGAGES
AND MORE.
SARAH SHIES FROM
TMG ON 23,
BEING THE MORTGAGE GROUP BY THE
WAY.
I DIDN'T KNOW THAT UNTIL TODAY.
>> REALLY?
NOT DOING MY JOB.
>> Kevin: ONE OF THOSE THINGS.
TALKING ABOUT PURCHASE PLUS
IMPROVEMENTS ON A MORTGAGE.
CAN YOU EXPLAIN WHAT THAT IS IN
GENERAL.
>> SURE WHEN SOMEBODY IS LOOKING
AT A HOUSE AND THEY WANT TO
INCLUDE IN NEW BUILD OR UPGRADE
ON EXISTING HOME, CARPETS,
WINDOWS AND LANDSCAPING AND
FENCING, YOU CAN INCLUDE THAT IN
YOUR MORTGAGE.
SO YOU CAN INCLUDE GENERALLY UP
TO 10% OF THE PURCHASE PRICE, IN
YOUR MORTGAGE AND USE THAT FOR
IMPROVIN
G THE PROPERTY.
>> Kevin: IT IS A PRETTY
STRICT SYSTEM.
A FEW PEOPLE AT SOME POINT
PROBABLY TRIED TO TAKE ADVANTAGE
OF THIS, IT IS NOT A SITUATION
WHERE I HAVE $300,000 HOME I GET
EXTRA $30,000, GOOD-BYE CAR
PAYMENT.
YOU CAN'T DO THAT.
>> IT IS REGULATED.
HOW YOU ACCESS THAT MONEY, WHEN
YOU ARE BUYING THE HOME YOU HAVE
TO PROVIDE THE LENDER WITH
QUOTES, SPECIFIC QUOTES FOR THE
WORK THAT YOU WANT DONE.
SO YOU CAN GO OUT TO GET THOSE
QUOTES.
THEY WITH ILL INCLUDE THE AMOUNT
AND ONLY THE AMOUNT OF THOSE
QUOTE, THEY WILL NOT ROUND UP OR
DOWN IN T
HE MORTGAGE.
AND THEN ONCE YOUR MORTGAGE IS
ADVANCED THE LAWYER THAT HANDLES
THE MONEY AND THE TRANSACTION
WILL HOLD BACK THAT MONEY UNTIL
THE WORK IS COMPLETE.
SO AS A BUYER YOU NEED TO GO
OUT, COMPLETE ALL OF THE WORK
THAT YOU SAID THAT YOU WITH ARE
GOING DO AND THEN EITHER
DEPENDING ON THE LENDER, PROVIDE
RECEIPTS FOR THE WORK THAT YOU
HAVE DONE, OR HIRE AN INSPECTOR
AND GO THROUGH THE HOME AND MAKE
SURE THAT YOU HAVE DONE
EVERYTHING YOU SAID YOU WERE
GOING TO DO.
ONCE THAT IS DONE AND THE LENDER
IS CONFIDENT THAT THE WORK HAS
BEEN DONE, THEY WILL ADVISE THE
LAWYER THAT THE FUND CAN BE
RERELEASED, YOU HAVE THE MONEY
TO REPLACE TO GET THE WORK DONE.
>> Kevin: YOU CAN TECHNICALLY
PAY THE CONTRACTORS IN ADD
RANCE.
>> SURE KEV EVERYBODY IN SOME
CIRCUMSTANCES IT MAY BE NOT
DO-ABLE, YOU FLAT OUT DON'T HAVE
THE MONEY, YOU HAVE TO FIND
CONTRACTORS KNOWING THAT THEY
ARE WILLING TO DO THE WORK AND
GET PAID AFTER.
WHO YOU MANY ARE WILLING TO DO
THIS?
IS THIS SOMETHING THAT IS
RELATIVELY COMMON?
>> IT DEPENDS ON THE SITUATION.
A LOT OF TIMES IF YOU ARE
LOOKING AT A NEWER HOME A NEWER
BUILD, THE CONTRACTORS WILL
BUILD IT INTO THE PURCHASE
PRICE.
WHICH IS SOMETIMES EASIER.
OFTEN TIMES IF PEOPLE KNOW
CONTRACTOR, THEY WILL LET THEM
PAY TOWARD THE END, BUT WE LIKE
TO DO AT OUR OFFICE, IS HELP
PEOPLE GET SET UP WITH SOME SORT
OF OPERATING LINE.
WE MAINTAIN CONTACTS WITH PEOPLE
IN THE BRANCHES IN BANK BRANCHES
TO HELP THEM TO GET SET UP WITH
AN OPERATING LINE THAT THEY CAN
USE FOR THEIR IMPROVEMENTS WHILE
THEY ARE WAITING FOR MONEY TO BE
RELEASED.
I SHOULD MENTION THAT IT IS A
ONE-TIME ADVANCE.
YOU CAN'T TAKE THE FUNDS ALL
ALONG THE WAY, YOU CAN NO IT
DO
ONE AND PAY FOR IT AND DO ONE
THING AND PAY OF FOR IT.
YOU HAVE TO COMPLETE THE WORK
BEFORE YOU CAN GET THE MONEY.
>> Kevin: THAT MAKES SENSE.
WHAT ARE THE BENEFITS?
>> BENEFIT IS BEING ABLE TO
INCLUDE THE COST OF THE
IMPROVEMENTS IN THE MORTGAGE,
RATHER THAN HAVING TO COME UP
WITH THE FUNDS AFTER THE FACT.
AND WITH TODAY'S INTEREST RATE
ENVIRONMENT YOUR BORROWING THAT
MONEY AT A LOWER INTEREST RATE.
THE MONTHLY PAYMENTS BECAUSE
THEY ARE AMORTIZED WITH THE
MORTGAGE SIGNIFICANTLY LOWER
THAN IF YOU WERE TO TAKE A LOAN
OUT AFTER THE FACT AND IT
IMPROVES THE VALUE
OF YOUR HOME.
I MEAN, IF YOU'RE LOOKING AT
MAYBE RESALE DOWN THE LINE AND
YOU WANT TO SAY ADD A GARAGE TO
MAKE SURE THAT YOU'RE ABLE TO
GET VALUE FOR YOUR MONEY DOWN
THE ROAD IT CERTAINLY ASSISTS IN
DOING THAT IN A WAY THAT IS
AFFORDABLE FOR MOST PEOPLE.
>> Kevin: SARAH SHIES FROM TMG
ON 23, QUESTIONS, TMGON23.COM
FOR
THE ON-LINE OR eMAIL THEM.