A common mortgage myth related to renovation is that you have to own your home for a million years before you can renovate. When in fact, you can take advantage of a renovation loan before you ever step through the front door. So how does it work? Well, we’re glad you asked.

Beginning the home renovation loan process

Just like a traditional home purchase, the renovation loan process starts with a pre-approval. Once you’ve been greenlighted with a realistic price point, finding your fixer-upper and making an offer comes next. Your Homebridge Mortgage Loan Originator will then suggest the best renovation loan choice for you.

Two of the most popular renovation loans are the FHA 203(k) loan, insured by the Federal Housing Administration, and the HomeStyle loan, guaranteed by Fannie Mae. It’s important to consider what you want to change or update on your home, as both the 203(k) and Homestyle loan provide financing options for structural or cosmetic changes.

The difference between a FHA 203(k) and HomeStyle loan

An FHA 203(k) is backed by the government and is a great option for prospective buyers with less-than-perfect credit scores. A standard FHA 203(k) loan can be used for major remodeling projects. One requirement is that you hire a qualified consultant to oversee every step of the work, from the plans to the finished product.

HomeStyle Renovation loan products are a conventional mortgage that allows buyers to finance improvements for up to 75% of the property’s as-completed value (that’s the appraised value of the home once the upgrades are completed).

No matter what loan option you and your Mortgage Loan Originator decide upon, the Homebridge team is here to guide you through every step of the way. Have questions? As the number one 203(k) lender in the country, our team of experts have the answers! Follow the link below to talk with a Homebridge Mortgage Loan Originator and get all the details on renovation loans.

https://learn.homebridge.com/renovation/

Related Articles

Fall is here and as the leaves change colors you may be asking yourself, what would make my home the one I’ve always dreamed of? Maybe an inground pool, a backyard deck or even a sunroom? Lavish changes like these can certainly make a difference in how you feel about…
Read More of the post Top 3 Home Renovations & How to Achieve Them

As homeowners across the country spend more and more time at home, there’s been an explosion of home remolding. With the fall season arriving, you may also be feeling the need to change the look and feel of your space and a renovation loan may be a great way to…
Read More of the post 3 Reasons to use a Renovation Loan

Many homebuyers look for the “perfect” home rather than the right home. If you’re shopping for a new home to build equity and set down roots for you and your family, think about expanding your search to include the often-overlooked fixer-uppers. Combining your purchase loan with a renovation loan can…
Read More of the post Why & How to Buy & Reno a Fixer Upper

While having a comfortable home is always a priority, it’s more important than ever as we’re spending more and more time at home. For some of us, this includes working from home as well, either part-time or full-time. We have suggestions for a few upgrades you can make to significantly…
Read More of the post Make Working from Home More Enjoyable with 3 Key Upgrades

We recognize this is a difficult time for many people. Click here or call 866-913-2951 for more information and to learn about current options available to our borrowers.