You’ve decided you want to renovate your home, or maybe you have your eye set on a home that needs a little work. Great! As the biggest renovation lender in the United States, we know a thing or two about successful renovations.
What Is a Renovation Loan?
A renovation loan is used to help remodel parts of a home. Whether minor upgrades or structural damage, renovation loans cover it all. They are used to help improve a home’s resale value, add extra amenities, or even spruce up a home that’s about to be sold to a qualified buyer. Renovation loans come in different loan types, so you can find the one that fits your unique needs.
Renovation loans have multiple benefits such as:
You can purchase and renovate your home with one loan
Many homebuyers will buy homes that are not brand new but are in great structural condition. Renovation loans help the soon-to-be-homeowners customize the place to their specific wants and needs.
With a renovation loan, you can still move into the home and have renovation begin after closing on the home while paying off the home over time.
Increases home’s value over the long-term
For someone who has lived in a home for a long period of time, renovation loans can be used to upgrade parts of the home that will make it a more valuable asset if and when the homeowner decides to sell.
If you decide to remodel your old kitchen into something more attractive, you’ll increase the value of your home. Kitchens help dramatically boost the value of a home.
Restoring an older home
There are a lot of older homes that have that irresistible “vintage charm”. You yourself may live in one of these homes or may want one of these homes sometime soon. A renovation loan will help you not only buy the home but give you an irreplaceable asset!
One of the biggest advantages of a mortgage is the tax deduction. With a renovation loan, you can deduct the loan interest from the loan on your taxes as well.
Some Misconceptions About Renovation Loans
Despite their massive benefits, some qualified buyers miss out on all the benefits of renovation financing because of some common myths and misconceptions. Here’s some of them that you may have heard of.
Misconception #1: Renovation loans are only for buyers looking to “fixer uppers”.
While it is true that renovation loans can be for homes in bad shape, they can still be used for homes in excellent condition. Many buyers just want modernized and updated features in their home and a renovation loan can be used for just that.
Misconception #2: Renovation loans are too expensive.
A renovation loan is a 30-year fixed rate loan. Not only can renovation loans be used for a better living space but they may also help you refinance to a lower interest rate than you may currently have.
Misconception #3: Renovation loans are too complicated.
Not at all! We streamline the process and only evaluate the after-improved value of the home. Qualifying for renovation financing is just like qualifying for any other loan.
Misconception #4: You cannot use your own contractor.
You can use your own contractor for renovation loans. However, they must be licensed in the state/county/city where the property is located.
Misconception #5: You cannot make small improvements such as new carpets, windows, or painting.
There’s no job that’s too small! Homebridge helps homeowners with projects of varying scale each and every day.
Is renovation financing right for you?
Renovation financing may be an excellent fit for you if:
- If you are planning to buy a new home that has some cosmetic changes you’d like to make
- If you are living in a home that you want to make cosmetic or structural repairs
- If you are looking to add features to your home while also refinancing your interest rate
- If you are had damage that your homeowners insurance will not repair
- If you are a seller who wants to showcase a more attractive listing
Renovation loans benefit buyers and sellers by giving them the opportunity to remodel a great home at an even greater price. Renovation offers short-term and long-term benefits by extending the life of a home, helping buyers secure a dream home and assisting sellers to make their home listing more attractive.
If you’d like to get started on the process to renovation financing, connect with a Homebridge MLO in your area today!