What homeowner doesn't dream of renovations? Renovations can be a necessity driven by our changing needs or obsolescence. Renovations may be beyond our available funds. Many times, waiting to build funds is not possible or comes at a compromising cost. Financing a renovation becomes a necessity.
There are several financing options available ranging from credit cards to home loans and more. Navigating your financing options can be daunting. The lowest financing is available is through your home loan financing. If you have enough equity, the lowest financing is a cash-out refinancing. If you don’t have enough funds, you can consider a renovation loan. Lets see why.
There are several financing options available ranging from credit cards to home loans and more. Navigating your financing options can be daunting. The lowest financing is available is through your home loan financing. If you have enough equity, the lowest financing is a cash-out refinancing. If you don’t have enough funds, you can consider a renovation loan. Lets see why.
Renovation Loans
Renovation loans are a generic category of home loans that allows the addition of a renovation budget. A renovation budget is created and the funds are set aside for a wide-array of improvements. These are government back loans are offered by HUD, Fannie Mae, Freddy Mac & VA.
Borrowers will work a general contractor to develop a construction budget. Borrower will also contact a renovation loan specialist to refinance an existing loan or a new loan for purchase. The construction budget is submitted with the loan application. Once funded, escrow closes, the construction will commence. Funds to the construction are released based on percentage of completion.
Borrowers will work a general contractor to develop a construction budget. Borrower will also contact a renovation loan specialist to refinance an existing loan or a new loan for purchase. The construction budget is submitted with the loan application. Once funded, escrow closes, the construction will commence. Funds to the construction are released based on percentage of completion.
Benefits
Let’s consider key benefits of renovation loans:
Low-Interest Financing - For refinancing, renovation loans offer the lowest financing for renovations. These rates are comparable to your home loan.
Let’s consider key benefits of renovation loans:
Low-Interest Financing - For refinancing, renovation loans offer the lowest financing for renovations. These rates are comparable to your home loan.
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Renovations - offers a wide-array of renovations. From minor improvements, with a minimum budget of $5,000, finished improvements, deferred conditions (new roof, heating/cooling, plumbing) to extensive renovations like adding a master suite or income properties. Deferred conditions can be included like needing a new roof, HVAC, re-plumbing & electrical. Landscaping and even adding new pools are allowable.
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Larger renovation budget - One of the key advantages is the renovation budget is based on the future value of the property that includes the improvements from renovations. Homeowner can implement renovations now to enjoy years to come.
Larger renovation budget - One of the key advantages is the renovation budget is based on the future value of the property that includes the improvements from renovations. Homeowner can implement renovations now to enjoy years to come.
We can Help
As a certified HUD 203k consultant, we assist the borrower through the renovation loan process. We act as field construction consultant with inspections, bid review and fund control. We are representing borrowers best interest and fund control protects the borrower with fund release based on inspections.
As a certified HUD 203k consultant, we assist the borrower through the renovation loan process. We act as field construction consultant with inspections, bid review and fund control. We are representing borrowers best interest and fund control protects the borrower with fund release based on inspections.