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.

Allowed improvements

The type of allowed improvements varies from minor cosmetic improvements to major structural changes depending on the program used.

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.
OR
Contact me now for additional information.  619-992-4061.  Laura@lauraborja.com