Do you like your house, but maybe it doesn't quite work for you anymore? Maybe you're considering buying a home that could use a little bit of work to make it perfect? A home remodeling project could be just what you need to breathe new life into a not-so-perfect home. If you knew how to get a home renovation loan, you could finance your project with ease. Maybe we can help.
What IS A Home Renovation Loan?
A home renovation loan is a type of mortgage loan that can help you complete your home remodeling project(s). Getting a renovation mortgage can help streamline your budget because this type of loan rolls your mortgage and renovation costs into one loan. That means you’ll only have one monthly payment.
A renovation loan can help you remodel your kitchen, complete cosmetic updates, and more. Your old mortgage would be refinanced into one loan to cover your new monthly mortgage payment as well as your home remodeling costs.
Financing Aging-In-Place Renovations
There are a few changes that we can incorporate into our homes to improve our quality of life as we age. Some can be as simple as installing sensor lighting around the house or replacing doorknobs with lever handles, but others require the help of an experienced professional like Longevity Home Solutions. An aging-in-place specialist could change your current countertop for a higher one, make door entryways smooth, or add no-step shower or walk-in tub. The complexity of accomplishing these tasks without turning your home completely upside down will inherently make them more expensive. Knowing just how to get a home renovation loan would be very helpful, wouldn't it?
One of the more popular renovation loans available is the FHA 203K renovation mortgage. Backed by the Federal Housing Administration (FHA), an FHA 203K is designed to help keep renovation costs low and can be used for both purchasing a home or refinancing your current one. Some benefits of an FHA 203K mortgage include lower down payment requirements and lower refinancing interest rates.
There are two FHA 203K loan styles to choose from: full/standard and limited. Both options can help with home remodeling, but one is for big projects while other is for covering the costs of smaller renovations.
FHA 203K Full/Standard—This loan can help update homes that may need structural repairs or a major renovation. For example, you could replace old plumbing, updated your floors, make energy efficient changes, or improve accessibility.
FHA 203K Limited—With this loan you could make smaller, cosmetic updates that typically have a shorter timeline. Common uses for this renovation loan may include repairing a patio, finishing a basement, or replacing your gutters.
See also: Aging-In-Place Renovations
Retired and on a fixed income? If you’re like many retirees, Social Security might be your only source of steady income. Though this could make it difficult to fund your necessary accessibility improvements, finding funding is not impossible.
What Is a VA Renovation Loan?
Did you know that we offer VA home renovation loans in additional to regular VA home loans? A VA renovation loan provides active duty and retired military members—and qualified spouses—with the necessary funds to remodel or repair their homes. Whether you plan to purchase a fixer-upper or want to update your current home, a VA home renovation loan offers the savings of a VA loan with the convenience of one application, one closing, and one monthly payment. Other benefits can include no down payment*, no private mortgage insurance and loan amounts up to $1 million.
Do Fannie Mae and Freddie Mac Offer Renovation Loans?
Fannie Mae and Freddie Mac both have government-backed renovation loan options. These loans give you the flexibility you need to turn a house into your dream home.
The Fannie Mae HomeStyle® loan and Freddie Mac CHOICE Renovation® mortgage offer affordable financing for your home renovation or home remodeling project and are designed to update older homes. Both programs offer flexible financing to make repairs to your existing home or if you want to purchase and renovate a home that is new to you.
If government-backed loans don’t work for you, there are plenty of other options to consider. Whether you want to add a pool, need to make repairs that an inspector found or want to give your home cosmetic upgrades, you can find financing to help make your home updates.
Repair Escrow—An escrow account is an account used to set aside funds for a particular purpose, usually property taxes or homeowner’s insurance. A repair escrow functions similarly. Your lender will set up and manage your repair escrow account to help you pay for your property repairs.
Pool Escrow—Feel like your backyard could use a pool? A pool escrow can help you make a splash. Your lender can set up an account with funds dedicated to covering the costs of building a pool.
EZ “C”onventional—When you need to make small upgrades to your home, you may need a smaller loan. An EZ “C”onventional repair escrow or EZ “C” simplifies the financing of small updates and repairs to a home that don’t require structural work.
When you’re ready to plan a home remodeling project, one of the last things you want to worry about is how things are going to be paid for.
Rick Byers and Longevity Home Solutions can help. Contact us today!
See also: Benefits Of Building An ADU