How to pay for home improvements
A remodeling project may involve lots of choices but you have fewer choices on how you pay for home improvements. Cash, credit cards and personal loans are always an option. So are the traditional home equity lines or cash out refinances. But what if the home is not worth enough in its current condition? Then a renovation loan could be the solution.
A few facts about renovation loans
Renovation Loan Purpose
You can pay for home improvements for both purchases and refinances.
Allowable occupancy types
Conventional renovation loans can be used for primary, second home and investment properties. FHA 203K loans can only be used for primary residences
Allowable property types
Detached homes, condos, manufactured homes, and 2-4 unit properties are eligible for both the conventional and FHA version of the programs
Required equity for a renovation loan
Conventional renovation loans require a minimum of 5% downpayment on a purchase or 5% equity if refinancing. For FHA 203K loans the requirement is 3.5% down payment or equity. The amount is based on the price plus cost of renovation or the “as completed” value of the home.
This allows you to access the equity that will be created once the improvements are made.
Ready to learn more details?
The visit the renovation loan info page for additional details about the different renovation loan options that can be used to pay for home improvements.
Contact me now for additional information. 619-992-4061. Laura@lauraborja.com