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A renovation loan provides a convenient way for borrowers considering home improvements to make repairs or renovations on their existing home, or a home they are purchasing. If you are looking to increase the value of your home then a renovation loan will be a great option.
How Does the Renovation Loan Work?
When you buy or refinance a home, a renovation loan allows you 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).
A renovation loan can be a more cost-effective way to renovate your home, since it combines the cost of the home and renovations into one conventional mortgage. It also addresses some common financial challenges with purchasing or renovating a home by offering:
- If you’re a first-time homebuyer it is possible that your down payment can be as low as 3%.
- A renovation loan can be used for any renovation project such as updates to an older home, extensive design improvements, and even to construct or renovate additional living spaces like in-law suites and basement apartments.
- You can also benefit from upfront draws (this is how contractors get paid for things like permits and architect’s fees) that could help your projects start sooner without you having to spend monies out of pocket.
- Renovation funds get bundled into your mortgage under one loan, so you only make one monthly payment.
Speak to one of our agents today by calling 855-900-8732 or click here to get started today!