Can I get a mortgage for homes that need renovations?
Want a mortgage for a fixer-upper? Read this and act.
Quick answer
Yes. You can get a mortgage for homes that need renovations. Lenders offer renovation mortgages, purchase-plus-improvements, construction mortgages, and blended financing. Terms vary by lender, but if you prepare the paperwork and a realistic scope of work, you’ll qualify.
How renovation mortgages work
Lenders underwrite the home value after repairs or they add renovation costs to the mortgage. They verify quotes, inspect the property, and may hold back funds until work is done. That means you can buy a property at today’s price and finance the upgrades into the loan — instead of paying out of pocket.
Common types of renovation financing
- Purchase-plus-improvements / renovation mortgage: Add approved repairs to the mortgage principal at closing. Great for buying and fixing simultaneously.
- Construction mortgage: Funds released in draws as work progresses. Best for major structural projects.
- HELOC or second mortgage: Quick access to cash for smaller upgrades. Interest-only options exist.
- Personal loans / lines of credit: Fast but usually higher interest.
Use the right product for the job. Small cosmetic work = HELOC or line of credit. Structural or major systems = construction or renovation mortgage.
What lenders look for
- Down payment and income verification
- Contractor quotes and a clear scope of work
- After-repair value (ARV) or appraisal that supports the loan
- Permits for major work
- A contingency plan if costs rise
Fail to provide these and lenders will either deny the renovation portion or demand higher down payment.
Actionable step-by-step plan (do this now)
- Get a pre-approval that includes renovation financing. Do not assume standard pre-approval covers repairs.
- Gather two contractor quotes and a simple scope of work with timelines.
- Order a home inspection and an after-repair value estimate.
- Choose the correct mortgage type (purchase-plus-improvements vs construction vs HELOC).
- Lock terms and ensure the lender will release funds on draws or convert to a permanent mortgage.
Why work with a local expert
A specialist knows which lenders will accept renovation costs, how to structure draws, and how to get the property appraised for ARV. That avoids costly surprises and saves time.
If you want clear answers, a lender-ready plan, and a local market edge, contact Tony Sousa. He’s a local realtor who guides buyers through renovation mortgages and matches them with lenders who understand fixer-uppers.
Call or email now: 416-477-2620 | tony@sousasells.ca | https://www.sousasells.ca
Get a pre-approval-ready checklist and a direct plan for the property you’re eyeing. Don’t guess — execute.
