How to Buy a Home in Alberta with Poly B Plumbing

Are you trying/ looking to buy a home in Alberta with Poly B plumbing?

We just completed financing on a purchase in Calgary with Poly-B throughout the home AND we managed to INCLUDE the cost to replace it it all into the mortgage too!!

Mortgage Mark Herman, best Calgary Alberta mortgage broker near me.

Action Steps

Please reach out if you would like to talk about:

1. The contact for the home/fire insurance company that INCLUDES Poly B, with full replacement value of the home, as required
2. Buying a home / getting a mortgage that needs Poly B replacement.
3. Adding/ including the cost of a renovation into your mortgage on purchase, or on renewal, or at any time.

Summary

Homes with Poly B are priced lower accordingly due to the difficulty of getting home/fire insurance BUT there is some “good uplift to the value” if it can be fixed.

It was a rough ride but now that we have all the pieces in place, the next ones will be easier.

2 extra moving parts to a normal deal:

1. Getting the quote for the replacement of the Poly B for the entire home, from a company that will do it.
2. Hardest part was getting the home/fire insurance to cover 100% of the home replacement cost.

Below is the wording in the mortgage approval that came back to us on what it had to include from the mortgage lender:

• *Copy of home insurance policy – need receipt of valid fire insurance particulars for the subject property.
• **Coverage must include full replacement cost of Poly B for single family dwelling
• *** Require full disclosure to insurance provider that home contains Poly B Plumbing and endorsement.

Tricks

Sometimes the insurance companies will only cover it for 30 – 60- or 90 days; until the work is completed. Then they go back to a normal policy at normal rates. If that is the case then the bank adds this clause:

• It must be noted that Poly B will be replaced within “x” amount of days.
  • (This is usually whatever the contractors timeline to having the work done is the “x-days”)

Adding the cost of the reno into the mortgage – our specialty for the last 20 years.

We have a fantastic “Perfect Home Mortgage” that allows you to add up to $40,000 easily, or with some difficulty (more questions and paperwork) up to $100,000 in renos to the mortgage.

Essentially, 1 quote is needed for the work being done, then bank send the funds for the home, and the reno to the lawyer. When the work is 100.000% complete we order an inspection of the work, and the the lawyer pays the company for the work. this usually has to be completed in 90 days.

Below is the wording from the bank for this:

• Please ensure the client knows there will be a holdback at the lawyers for the full cost of the Poly B improvement.
• It is the buyer’s responsibility to make arrangements with the contractor to either pay them direct or have lawyer directed funds once completed.
• It is a condition that an appraiser inspects and confirms the work done prior to funds being released and the cost of the inspection is paid by buyer.

 

ENDING…

Is this for you? Are you ready for the ride?

 

* Poly B, or polybutylene, is a type of plastic plumbing pipe that was commonly used in residential plumbing systems from the mid-1970s to the mid-1990s. It was initially favored for its low cost and ease of installation, but it has since been identified as a material prone to leaks and failures.