Renovating a home can be fun. Stressing over renovation costs? No so much. But, when you get a mortgage that covers both the purchase and renovation costs, you can spend less time worrying and more time enjoying your home. Plus, homes that need a little TLC might be on the more affordable side when you use a renovation home loan to buy and update your next house.
Benefits of home renovation loans
Whether you want to buy a home that could use some modernizations, or you want to refresh your current digs, a renovation loan can help you finance your project. But what makes a renovation loan the best option? Check out these renovation mortgage benefits:
- Streamlined financing. Juggling two loan payments can feel hectic, especially if they are due on different dates. A renovation loan that covers renovation costs and the home purchase can make your life a little bit easier because one loan=one payment.
- Adding your style. If customizing your home is a non-negotiable for your homebuying process, it might be time to consider a home renovation loan. From the day you take ownership, a renovation loan affords you the opportunity to begin personalizing your home.
- Leverage one rate. Want to know what’s great about one loan? One rate! A home improvement loan means that you can close at the locked rate for both your renovation and purchase costs. It will only change if you refinance or if you have an adjustable-rate mortgage (ARM).
Popular home loans that include renovation costs
Having several renovation loan options to choose from is just as important as deciding on what changes to make to your home. PrimeLending offers you multiple renovation home loans to choose from. Popular home improvement loans (that also cover renovation costs) include:
- FHA 203k – Backed by the Federal Housing Administration (FHA), an FHA 203k loan is a low-down payment option that can be used for both cosmetic and structural repairs. It is offered as FHA 203k Full/Standard for structural or major renovation work, as well as FHA 203k Limited for smaller cosmetic upgrades.
- VA Renovation – For veterans, active-duty military members, and qualified spouses, a VA renovation loan (backed by the U.S. Department of Veterans affairs) can be used to make home repairs or completely remodel a home. It includes the same benefits of a VA purchase loan, like no down payment*, while giving you the convenience of one mortgage to repay.
- HomeStyle/CHOICERenovation loans – Backed by Fannie Mae and Freddie Mac, respectively, these home improvement loans can help homebuyers and homeowners alike enhance a property. Uses include, but aren’t limited to, interior and exterior upgrades, new fence, new deck, and landscaping.
Other renovation home loans include EZ “C”onventional for cosmetic improvements, a repair escrow to set aside funds for repairs, and a pool escrow to add an in-ground pool to your back yard.
If you are considering buying and renovating a home, or making repairs to your current home, your local PrimeLending loan officer can help you find the mortgage that suits your specific needs. Contact them today to get started.
*Down payment waiver is based on VA eligibility.
