Do we use laminate or real wood floors? Which colors are best to create a warm feel in my home? To finish or not to finish the basement? Deck or basement bar? If you are like me or other countless individuals who have binge watched a few HGTV, This Old House or DIY shows in the past, you know this task is more than just selecting the right contractor, colors and appliances. It’s allowing our creative juices to flow.
BUT, our creative juices can sometimes exceed our cash flow. How do we pay for this project? Do we have enough equity in our home to get a loan? If we don’t have equity can we obtain financing? Should we sell some of our investments to fund this project? Many individuals and families frequently run into these questions.
Here’s the answer - a RENOVATION LOAN. There are two programs have stood the test of time. Let’s do a quick overview of how they work and how they can help you.
FHA 203k Renovation Loan
Probably the most popular and effective. This fantastic mortgage program allows a potential purchaser to roll renovations into their purchase loan. Below are a few of the many highlights:• Small renovations such as renovating a bathroom to major renovations including rebuilding a home from the ground up on its original foundation
• Low down payment (3.5%) and the seller can still pay up to 6% of your closing costs
• All repairs are performed after closing
• One settlement and all funds are disbursed to a contractor in draws after closing
• Also can be used for current homeowners that want to renovate but may not be sure if they have adequate equity
Fannie Mae Homestyle Renovation Loan
• Minimum 5 percent down payment
• Purchasing a property or refinancing a current home
• Can be used for owner occupied, second homes and investors
• All repairs are completed after closing
• Improvements that can be financed are not limited to landscaping, appliances, swimming pools, roofs, HVAC and more.
Renovating a property doesn’t have to be difficult. The FHA 203K and Fannie Mae Homestyle Renovation loans are great options to help make your real life HGTV dream home a reality.
Guest post written by: Aaron Simmons Senior Loan Officer
NMLS ID # 239638
Company NMLS ID # 86548 (www.nmlsconsumeraccess.org).
Branch NMLS ID # 1197073
(804) 292-2089 Direct
(703) 728-2812 Cell
(804) 292-2089 Fax
asimmons@fhmtg.com
www.fhmtg.com/aaron-simmons
