Ignorant question re: Property Brothers (HGTV)

Temp53431437508241 · February 2012

How does that work for the buyers exactly?

Their budget is say $400k, so they can get a mortgage for that much. Where does the money for the renovations come from when they buy a $320k house? Do they take out a separate loan for that $80k?

kaylie622 · February 2012

There are loans that cover the purchase price plus renovations. It's a bit more complicated than a typical mortgage and the total loan amount can't exceed what the house would be worth after renovations. I'm fuzzy on the exact details, but a mortgage broker could probably give you all of the ins and outs. I have been told that the interest rates are a bit higher than conventional mortgages and that they won't loan you the full amount for the renovations.

katharine25 · February 2012

I did a "renovation loan" - My mortgage was purchase price + renovation costs = market value post construction, all at mortgage interest rate. It's complicated and a lot of red tape, buy allowed me to but an un-mortgable property (it was in severe disrepair) and renovate immediately. Google 203K and more details come up. 203K is specifically FHA, but some banks have non-FHA loans (which I did - less restrictions to what you want to do)

But not a lot of people know about these loan programs, so maybe PB is home equity loans or the new owners pay with cash and finance with little downpayment? Maybe Home equity loans?

lil_jen051708 · February 2012

A 203k loan would work for a similar situation in the US. I believe that they are in Canada so I'm not sure of the rules or mortgages available there. I would guess that the show could buy the house, pay for renovations and then the homeowners get a mortgage and buy it from the show at cost?

Temp53431437508241 · February 2012

Thanks for the input. I was just curious, since there are several older homes in my area that are well within our price range, but need some work. When we are ready to sell this house and buy another, I would love to be able to do something like that.

KurtsWife09 · February 2012

They are in Canada and their home market/mortgages are different. My SIL lives in the area the PB work in, and she said there is an average of 60 days turnover on properties and their mortgage included renovation costs with relatively little issue.

Ignorant question re: Property Brothers (HGTV)

Re: Ignorant question re: Property Brothers (HGTV)

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