Since March 2020, there has been a substantial upswell of home improvement projects such as creating beautiful outdoor living spaces or completing a dream kitchen remodel. From simple renovations to complete remodeling, the home front has been getting a massive facelift. Enter, Renovation Loans. While designed to provide the needed funds to update or renovate your home, it’s a good rule of thumb to view these Loans as a means to reduce your long-term costs or increase the value of your property. A third scenario for considering a Renovation mortgage? If you’re interested in buying a home that is at a lower price point or “fixer-upper.”
Renovation Loans
What is a Renovation Loan?
Who is eligible?
Renovation Loans come in a number of “flavors.”Some of those mortgages include simple personal loans or government-sponsored loans, such as Freddie Mac’s CHOICERenovation loan, Fannie Mae’s Home Style renovation loan and FHA 203(k) refinance loans from the Federal Housing Administration. (The options available to you depend upon your credit score and the types of renovation you have planned. For instance, FHA 203(k) loans limit the renovations that can be done, but also offer more lenient credit requirements.)
Features
One payment
While available in a number of loan types, a Renovation mortgage can help eliminate paying two separate debts – remodeling costs can become part of your new mortgage amount.
Rates are lower now
With rates being significantly lower, a Renovation Loan may allow you to borrow for home improvements without dramatically affecting your monthly mortgage payment.
Add value from your renovation
While a Mortgage Loan can fund remodeling updates that offer more comfort, usability or even a decrease in your utility bills, they can also add value in your home… that’s a win, all the way around!
Who is eligible?
Renovation Loans come in a number of “flavors.”Some of those mortgages include simple personal loans or government-sponsored loans, such as Freddie Mac’s CHOICERenovation loan, Fannie Mae’s Home Style renovation loan and FHA 203(k) refinance loans from the Federal Housing Administration. (The options available to you depend upon your credit score and the types of renovation you have planned. For instance, FHA 203(k) loans limit the renovations that can be done, but also offer more lenient credit requirements.)
What other loan types are available?
When it comes to loans, you have many more options than you think. Find out about some here:
