-Financing Your Dream Home and Making it a Reality- Mark Taylor, Senior Licensed Loan Officer, NMLS: 1504731
Are you dreaming of a home that perfectly expresses your individual style? With a renovation loan, you can make those dreams a reality without the hassle of DIY projects or saving up for years. You can also go all the way and rehabilitate a property. Here's everything you need to know:
What is a Rehab or Renovation Loan? This loan is a type of mortgage that allows you to finance the cost of your home and the renovations or repairs needed to make it your dream home. It's all rolled up into one mortgage with more affordable monthly payments than purchasing an existing home with a predetermined look and feel.
What are the Rehab/Renovation Loan Options? There are several renovation loan options to choose from, including:
FHA 203(k) Standard: Allows you to borrow up to 96.5% of the appraised value of the home after renovations are completed.
FHA 203(k) Limited: Covers non-structural repairs only, with a maximum renovation cost of $35,000.
HomeStyle Renovation: Allows you to buy a house and fix it up or refinance your existing mortgage and receive funds to cover the costs of repairs, remodeling, renovations or energy efficient improvements to the property.
A loan officer that specializes in this type of loan will be best suited to help determine which product is best for your scenario.
What Can You Do with a Renovation Loan? With a renovation loan, you can add your own taste and style to a house to make it your home. Some popular renovation ideas include:
Rehabilitate a property
New grand kitchen
A bathroom for every bedroom
A stylish laundry room
A garage bar
How Do Renovation Loans Work? The process of getting a renovation loan is similar to getting a regular mortgage with the exception of securing a contractor beforehand and determining a budget. After you apply and are approved, the funds for the purchase and renovations are held in an escrow account. The licensed contractor will complete the work, and payments are made to the contractor from the escrow account.
What are the Benefits of a Renovation Loan? Renovation loans offer several benefits, including:
Affordable monthly payments
Ability to finance both the purchase and renovations of a home
Option to hire a professional contractor to complete the work
Opportunity to add your own style and taste to a home
A strong potential for instant equity in the home
How to Qualify for a Renovation Loan? Qualifying for a renovation loan requires meeting certain criteria, including:
A minimum credit score of 580
A recommended debt-to-income ratio of 43% or less
Proof of income and employment
A property appraisal to determine the value after renovations
If you're ready to make your dream home a reality, a renovation loan may be the perfect option for you. Get started with a free consultation to learn more about your options and start designing your dream home.
Get all the information you need and of your questions answered with a free consultation:
Mark Taylor | NMLS # 1504731 | AL: 67777, AZ: 0939604, CA: CA-DBO1504731, CO: 100520451, FL: LO35912, GA: 51692, ID: MLO-21237, IL: 031.0043598, KS: LO.0039017, KY: MC394725, LA:, MO: 18752-MLO, MT: 1504731, NE:, NV: 59226, NJ:, NM:, NC: I-170118, OR:, PA: 66651, RI:, SC: MLO-1504731, TN: 125173, TX:, VA: MLO-29826VA, WA: MLO-1504731, WV: LO-36484, WI: 1504731, WY: 6646
For information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. UMortgage LLC D/B/A UMortgage NMLS #1457759 Equal Housing Opportunity, 2022 All Rights Reserved.