How to finance home improvements or additions
I am going to show you how to finance in home improvements or additions. If you are having a hard time finding a home that fulfills all your hopes and dreams, perhaps a renovation home loan can help you. It takes a special person to see the potential in a home that’s in need of serious rehab. If you’ve got your heart set on buying fixer-upper— but don’t have the savings to cover both a down payment and a renovation — there are loan products out there that could help you make your dream a reality. If you want to buy a fixer upper or give your home a total makeover, we have you covered. The Richard Woodward Mortgage Team at Service First Mortgage will help you decide which type of loan is the best match for your home purchase or renovation project. We make home improvements easy
Home prices are rising quickly. If you want to stay in your existing home and add on or upgrade, this is the perfect home loan for you. Refinance your current home loan and you could possibly even avoid or get rid of your current mortgage insurance payment.
Consider a loan with a built-in construction loan feature
The Federal Housing Administration (FHA) 203(k) rehabilitation loan or Fannie Mae HomeStyle Renovation Mortgage could be good financing options for buyers seeking fixer-uppers. These home improvement loans allow you to purchase the home with a reserve that’s put in escrow the funds to renovate.
Fannie Mae HomeStyle®: The Fannie Mae HomeStyle® loan is a single-close loan that includes the cost of home repairs in the overall loan amount. This loan can be used for repairs that an appraiser requires, or for changes the homeowner wants to make, and it can be used to pay for both structural and cosmetic repairs.
This loan appeals to borrowers because they only have to deal with one loan, one monthly payment and lower interest rates that cover both the purchase price and the cost of repairs. With a HomeStyle® mortgage, your final loan amount is based on the projected value of the home after the repairs are completed. Fannie Mae’s HomeStyle® loan is a sound choice for a buyer with top-notch credit who has access to competitive interest rates.
FHA 203(k): This government-backed loan is similar to HomeStyle®, but it’s open to buyers with lower credit scores. This is usually the more expensive option of the two because FHA mortgages have higher mortgage insurance premiums for borrowers who apply with smaller down payments. These mortgages have an upfront fee that’s included in the overall principal of the loan.
FHA 203(k) loans are divided into full and streamline options, and the type you need will depend on the state of your property. The FHA 203(k) Full Loan is intended for a primary residence that needs serious or significant repairs, while the Streamline Loan is used to cover minor repairs totaling less than $35,000.
Jumbo One-Time Close: This program is for loan amounts greater than the conventional loan limit. They are great for luxury homes or large additions. They will require 20% down or 20% equity.
The Richard Woodward Mortgage Team at Service First Mortgage are experts at helping you arrange your home improvement financing. We are with your from start to finish. We can even help you find the perfect contractor.
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Richard Woodward, NMLS 217454
Your Local, Direct, 5 Star Rated Mortgage Lender, Specialty Lending Manager
Office: (214) 945-1066
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Service First Mortgage NMLS 166487
6800 Weiskopf Ave #200, McKinney, TX 75070
Licensed by the Texas Department of Savings and Mortgage Lending (SML) Mortgage Banker Registration. Service First Mortgage is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer and property qualification. Rates and fees are subject to change without notice. The views expressed on this site are those of the individual author and do not necessarily reflect the positions, strategies or opinions of Service First Mortgage or its affiliates.
