Does looking around your home make you feel a little bit like Goldilocks? Maybe the kitchen feels too small or the carpeting feels too old. You’re in luck because a home renovation loan could help you make your home feel “just right” again.
What is a renovation home loan?
If your home is starting to feel “retro” but not in a “cool/trendy” way, a renovation home loan could provide you with the funds you need to modernize your home. From small cosmetic repairs, like new flooring, to total overhauls, like opening up that wall between your kitchen and living room, there’s a loan for nearly any type of renovation.
For instance, PrimeLending offers 23 renovation home loans, including FHA renovation loans, to provide customers with niche loan solutions for their unique home projects.
How do home renovation loans work?
Each home renovation loan works differently based on the type of financing you are seeking. If you are dreaming up improvements for your current home, an EZ “C”onventional loan could help you with cosmetic updates. If you found a fixer-upper filled with potential, an FHA 203K mortgage could help you buy and repair the home. Three popular loans for renovations include:
FHA 203K—Backed by the Federal Housing Administration (FHA), you can use an FHA 203K renovation loan to purchase or refinance a home. It enables you to make cosmetic or structural repairs because the loan is offered in two forms: FHA 203K Full/Standard and FHA 203K Limited.
VA Renovation Mortgage—The United States Department of Veterans Affairs (VA) offers a VA renovation loan to active duty and retired military members, as well as qualified spouses. This program can help veterans make their homes more accessible and offers benefits like no down payment* and no private mortgage insurance (PMI) required.
EZ “C”onventional—When you want to make cosmetic home improvements, an EZ “C”onventional Repair Escrow (a.k.a. EZ “C”) can help you get the job done. It simplifies the financing for small, non-structural upgrades like updating your kitchen, bathroom or a bedroom.
What are the benefits of a renovation mortgage?
A renovation loan can be a good idea for both current homeowners and new homebuyers who want to live in their dream home. For homeowners, if you cannot build up your savings to pay for renovations, a home renovation loan can help you finance your project. On the other hand, if you’re a first-time home buyer who has found an “almost perfect” home, a renovation mortgage can help you pay for the home purchase plus the cost of renovations all under one loan and one monthly payment.
Another benefit of home renovation loans is that the completed project can give you a return on your investment. Things like a new roof or updated bathroom can add value to your home which could be beneficial if you plan to sell your home in the future. Plus, renovation loans could help you make energy efficient upgrades to your home without having to dip into your savings account.
So, if you aren’t loving the vintage look your home has, reach out to a PrimeLending mortgage professional to help you create a game plan to modernize your home. Contact your local PrimeLending loan officer today to discover your options.
*Down payment waiver is based on VA eligibility.
