Can I get a mortgage for homes that need
renovations?
Can I get a mortgage for a home that needs renovations? Yes — and here’s the practical, no-fluff plan to do it in Georgetown, Ontario.
Quick answer up front
Yes. Lenders will finance homes that need work — but not all renovations are treated the same. You can use a purchase-plus-improvements mortgage, a construction/renovation mortgage, or tap home equity or a HELOC after purchase. The right path depends on the scope of work, your down payment, and the lender’s rules.
This guide tells you exactly how to get one, what lenders will ask for, how to price your home, and the fastest way to protect your profit when selling in Georgetown, ON.
Why this matters for Georgetown sellers
Georgetown has lots of character homes and older stock. That attracts buyers, but many properties need updating. As a seller, you have three choices:
- Sell as-is and discount the price.
- Do targeted renovations to boost sale price and speed.
- Market the home to buyers who will renovate after purchase (and know how they’ll finance it).
Smart sellers know which option maximizes net proceeds. Financing options for buyers matter because they affect demand and final sale price. If buyers can’t get a mortgage for a property that needs work, your pool of buyers shrinks and you lose leverage.
The three mortgage routes that work in Georgetown
1) Purchase-Plus-Improvements (best for modest to medium renovations)
What it is: Lenders allow you to add renovation costs to the mortgage at purchase. They underwrite based on the expected after-renovation value (ARV).
Why it works: Buyer finances both purchase and renovation in one loan, so you get more eligible buyers and can keep a higher asking price.
What lenders want: realistic contractor quotes, a scope of work, permits (if needed), and sometimes an appraisal based on ARV. Completion usually must happen within 6–12 months and funds can be held back in escrow until the work is done.
2) Renovation or Construction Mortgage (best for extensive work)
What it is: A staged loan where funds are released in draws as work is completed. Often used when major structural changes or full renovations are required.
Why it works: Lender controls the draws to protect value and ensures work is done before full funds are released.
What sellers need to know: If your buyer uses this route, expect stricter underwriting and longer timelines. Some buyers prefer it because it protects them from paying for incomplete work.
3) HELOC, Cash-Out Refinance, or Personal Renovation Loan (post-purchase options)
What it is: Buyer buys the house with a standard mortgage, then uses home equity or a personal renovation loan for the work.
Why it works: Faster to close the purchase and you avoid construction lending complexity.
Limitations: Buyer needs equity or credit to qualify. Not ideal if the property needs immediate expensive work and the buyer is low on funds.
What lenders will evaluate (short checklist)
- Scope of renovations and whether they’re cosmetic or structural
- Contractor quotes or a licensed contractor’s timeline
- Permits needed and whether they’ll be pulled
- After-renovation value (appraiser’s estimate)
- Borrower’s credit, income, and down payment
- Lender holdbacks (funds held until completion)
If the house is unsafe or requires demolition, many lenders won’t lend until repairs are made.
How sellers should price a renovation-needed home in Georgetown
- Get a local reality check. Ask a realtor who knows Georgetown to run a quick ARV vs as-is analysis.
- If buyers can use a purchase-plus-improvements product, you can list higher. Show prospective buyers estimated renovation costs and contractor quotes to make financing smoother.
- If buyers likely need to get a standard mortgage only, expect an as-is discount. Price to move, or fix key items first — kitchens, bathrooms, roof — to remove financing friction.
Practical rule: small cosmetic work (paint, flooring, minor fixtures) moves buyers faster than full gut jobs. If you can do targeted updates that cost <5–8% of expected sale price, you’ll usually see outsized returns.
Actionable steps for sellers who want top dollar
- Get a local market consult — know what renovated homes sell for in your neighborhood.
- Obtain 2–3 contractor estimates for any recommended work. Keep them realistic and in writing.
- Ask your realtor to prepare an ARV-based selling strategy showing buyers how they can finance via purchase-plus-improvements.
- If you choose to sell as-is, price for the investor/handyman buyer and be transparent about what needs work.
- Consider small high-ROI fixes: fresh paint, decluttering, landscaping, basic staging.
- Keep permits and receipts in a folder to show buyers and lenders.
Real examples — how buyers finance these homes in Georgetown
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Buyer A wants a bungalow that needs a kitchen and bathroom update. They use a purchase-plus-improvements mortgage with contractor quotes and an ARV appraisal. Lender releases a portion on closing and holds the rest in escrow until completion.
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Buyer B plans a full gut-and-renovate. They use a construction mortgage with staged draws and an experienced contractor. The loan process is longer but cleaner for a big project.
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Buyer C is cash-ready. They buy with cash and flip the property, paying contractors directly.
Knowing which buyer you want to attract helps you decide whether to renovate before listing.
Local pitfalls to avoid in Georgetown
- Promising big structural fixes without permits — lenders will insist on permits.
- Over-improving for the neighborhood — don’t spend $100K to get $50K more on a street that won’t bear the increase.
- Hiding issues — disclose everything. Buyers who discover problems mid-inspection walk away.
How working with a local expert changes the outcome
A local Realtor who knows Georgetown tells you what buyers and lenders actually accept. They’ll:
- Break down which renovations will unlock mortgage products.
- Connect buyers with trusted mortgage brokers who do purchase-plus-improvements and construction loans.
- Help price the home so you don’t leave money on the table.
That’s the difference between a listing that drags versus one that sells fast to a qualified buyer.
Selling strategy cheat-sheet for Georgetown sellers
- If repairs are under $30k and cosmetic: do them or get contractor quotes to present to buyers.
- If repairs are structural or >$50k: consider selling to an investor or marketing to buyers who can use a construction mortgage.
- If you need a fast sale: price competitively and disclose issues.
- If your goal is max profit: run ARV comps and invest in targeted renovations that buyers value.
Final straight talk
Buyers can get mortgages for homes that need renovations — but the process requires documentation and the right lending product. As a seller in Georgetown, your job is to make financing easy for qualified buyers. That improves demand, reduces days on market, and raises your net proceeds.
Want this handled the right way? I’ll give you the plain plan: which fixes to do, how to present contractor estimates to lenders, and the local lenders who will back the loan. Reach out and get it done.
Contact: Tony Sousa — tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
FAQ — Mortgages for Renovation Homes in Georgetown, Ontario
Q: Can a buyer get a mortgage for a house that needs major structural repairs?
A: Often no, at least not until those repairs are scoped and planned. Major structural work may require a construction mortgage or the seller to complete critical repairs first. Lenders avoid unsafe properties.
Q: What paperwork will lenders want for a purchase-plus-improvements mortgage?
A: Expect contractor quotes, a detailed scope of work, a timeline, and sometimes permits. Lenders may order an appraisal based on after-repair value. Some hold back funds until work is finished.
Q: Will adding renovation costs change the down payment requirement?
A: It can. Lenders typically look at the total loan amount relative to the post-renovation or purchase price. If you’re under 20% down, mortgage insurance rules apply. Speak with a mortgage broker for specifics on your case.
Q: How long does a renovation mortgage take to close?
A: Purchase-plus-improvements loans often close like a standard mortgage if the paperwork is complete, but construction mortgages can add weeks because of draws, inspections, and release conditions.
Q: Are there lenders in Georgetown that specialize in renovation financing?
A: Yes. Several Canadian banks and mortgage insurers and many local mortgage brokers handle renovation products. A local realtor can connect you to brokers experienced with Georgetown properties.
Q: Should I fix things before listing or sell as-is?
A: It depends on the cost of fixes and the neighborhood. Small, inexpensive improvements often yield the highest return. For large, expensive projects, selling as-is at a discount or marketing to investors may be smarter.
Q: Can a buyer use a HELOC right after purchase to pay for renovations?
A: Yes, if they have enough equity or qualify for one. That route can be faster but requires creditworthiness and available equity.
Q: How do I show lenders that my renovation plan adds value?
A: Provide comparables of renovated homes nearby, contractor quotes, a scope of work, and before/after photos where possible. An ARV appraisal helps.
Q: Will renovations affect home inspections and offers?
A: Yes. Buyers and inspectors will look closely at any deferred maintenance. Transparency and pre-listing inspections can reduce surprises and keep offers strong.
Q: Who should I call in Georgetown to get started?
A: Contact Tony Sousa for a no-nonsense, local evaluation. He’ll tell you which renovations to prioritize, connect you with mortgage brokers who finance renovations, and help price the property to attract qualified buyers.
Tony Sousa — tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
