Types of Home Renovation Loans
Do you love your home but aren’t quite in love with it yet? More often than not, your love for your home isn’t always unconditional. There’s always something that needs to be repaired or replaced, such as your roof or siding. Or maybe you’ll love your home more with new vinyl plank flooring or a renovated kitchen. Whatever you need to feel the love for your home, you’ll likely need some money to achieve it.
That’s where a home renovation loan comes in.
What is a home renovation loan?
A home renovation loan – sometimes called a home improvement loan – is when you borrow money from a financial lending institution to upgrade your home. These renovations can enhance the livability and usability of your home, remove any health and safety hazards, or increase your home’s energy efficiency. If you plan on selling your home soon, using a renovation loan to make upgrades can increase your home’s value and asking price. For potential homebuyers, a renovation loan allows you to make necessary improvements to pass a home inspection or move into your dream home.
With a home renovation loan, you can complete some of this year’s most popular home improvement projects, including:
Creating an open-concept layout
Building in innovative home technologies
Renovating your bathroom
Creating an outdoor living space
What are the different types of home renovation loans?
However, the different types of home renovation loans can be confusing. That’s where Pacor Mortgage can help! We offer several home renovation loans based on your financial situation and home improvement needs to help make the home of your dreams a reality. Our featured renovation products are available on purchase AND refinance transactions!
Streamlined Renovation
If you don’t have extensive repairs or renovations, the Streamlined Renovation Loan could be the perfect option. This program allows homeowners and homebuyers to finance up to $35,000 to improve, repair, or upgrade a property. As a borrower, you can tap into cash to make necessary improvements, including those identified by a home inspector.
This loan is an excellent option for cosmetic fixes such as new flooring, paint, upgrading countertops, or replacement windows and doors. You can also convert their new home to your dream home before moving in by renovating the kitchen or installing new flooring throughout. You can include up to 15% of the as-completed appraised value for renovations. These one-time close, renovation options give you peace of mind to lock in one low rate for all your improvements.
HomeStyle® Renovation Loan
A HomeStyle®Renovation loan from Fannie Mae can make the difference between a house and your dream home or help restore an older home to its former glory. While ideal for minor additions or kitchen and bathroom renovations, a HomeStyle®Renovation loan provides funds for numerous renovation projects, from repairs and energy-efficient updates to luxury upgrades and landscaping. With this loan, you have up to 180 days to complete work. Additionally, you can include up to 75% of the as-completed appraised value when determining your loan amount.
This HomeStyle® loan also features a one-time close option first mortgage, allowing you to purchase a property or refinance an existing property and include the cost of renovations. The home repair costs are rolled into your existing mortgage balance for one easy-to-manage monthly payment.
Construction/Renovation Loan
A construction loan, or self-build loan, is a short-term loan used to finance the building of a home, a complete home renovation, or a major addition to your current home. You (or your contractor) take out a construction loan to cover the costs before obtaining long-term funding. Construction loans generally have higher interest rates as they are considered higher risk than traditional mortgage loans. However, like our other renovation products, we offer one closing, one set of closing costs, and one low-interest rate.
Trust Pacor Mortgage
If you’re unsure which home renovation loan option is best for you, consult the mortgage experts at Pacor Mortgage. We’ll discuss your financial goals and help you turn your renovation project vision into reality. Fall in love with your home all over again! Call us today at 773-881-7744 or fill out our contact form to schedule an appointment today!
