Home Renovation LoansWhether your home improvement projects are large or small, a home renovation loan from Smart Mortgage Centers may be right for you. With a home improvement loan, you’ll be able to finance simple upgrades, remodeling or more complex renovation projects, and everything in between. Monthly payments on home renovation loans are typically lower than credit cards or personal loans and, in some cases, financing may even be tax deductible*. If you’re considering a home remodel, here is more information about home remodeling loans and what they can do for you and your home.
Renovation Loans: Features & Benefits
Making significant home improvements such as adding an extra room or replacing the roof not only makes a difference in how much you enjoy your home, but it can improve its overall value as well. If you aren’t happy with some aging features of your house, consider using a home renovation loan to transform your living space into the home you’ve always dreamed of. Similarly, home improvement loans can help buyers who decide to purchase a fixer-upper home that requires a significant amount of home remodeling.
Although you may be able to pay for home improvements with a personal loan or other types of financing, these methods have higher interest rates and monthly payments. With a renovation loan, you’ll be able to finance a construction period of up to six months with only one set of closing costs and absolutely no prepayment penalty. While the total loan amount is based on the property’s appraised value once the repairs are complete,** the down payment requirement is just 3.5 percent.
Renovation Loan Types
FHA 203k Option
If you plan to purchase a fixer-upper or renovate your existing home, an FHA 203(k) loan may be the perfect loan for you. FHA 203(k) loans are backed by the federal government, and are a great loan option for those who want to purchase a home and perform upgrades, repairs, remodel or customize to their needs and wants.
Smart Mortgage Centers has FHA 203(k) specialists standing by to answer all of your FHA 203(k) Renovation Loan questions.
Fannie Mae HomeStyle®
The Fannie Mae HomeStyle renovation loan allows you to either purchase a new home or refinance your existing home and make personalized improvements with one loan closing. The cost of your personalized improvements is placed in an interest-bearing Escrow account and disbursed as the work is completed and inspected.
The HomeStyle loan does not have any minimum amount of improvements or any restrictions on the type of repairs that can be included in your loan. The only requirement is that any improvement must be permanently affixed to the property and adds value to your property. HomeStyle allows you to build home equity while increasing your comfort and enjoyment in home ownership.