Looking at a Fixer-Upper? The Benefits of a Renovation Loan
If you are searching for your dream home and are not finding what you are looking for, it may be time to consider a home that you can purchase and renovate into the home you’ve always wanted. If you don’t have the cash on hand to tackle a renovation after you purchase the home, consider a Renovation Loan. Here are more details and benefits of a Renovation Loan:
What is a Renovation Loan?
One popular type of Renovation Loan, known as an FHA 203(k) loan, allows a buyer to purchase a home and make improvements to it with the same loan. By combining the funds needed for the renovation with the home mortgage, buyers are able to limit closing costs as there is just one loan to fund both needs. The FHA 203(k) loan program is backed by the federal government and could require a down payment as low as 3.5% of the total loan amount.
Benefits of a Renovation Loan
There are many benefits to using a Renovation Loan to purchase a home. One of the biggest benefits is combining the cost of the home and the renovation into one low-cost mortgage. Along with that, you are able to borrow against the property value after the improvements to the property. With a Renovation Loan you are increasing your property value and building equity in your home from the start.
Eliminating Barriers to Home Ownership
Right now, people who desire homeownership are facing many hurdles to acquiring their dream homes. Some of these hurdles include limited inventory, lack of affordable options, time to locate the right home, and inability to find the right neighborhood. All of these issues can be overcome with the use of a Renovation Loan. A home in the right neighborhood that might need some improvements could be a great choice in this situation. In fact, one of the biggest trends on television home improvement networks is finding a ‘fixer-upper’ that may have been overlooked by others, and turning into the home of your dreams.
Refinance with a Renovation Loan
Another great benefit of a Renovation Loan is that it can be used with your existing home as a refinance and renovation option. This is great for homeowners who love their current homes, but need to make a few improvements and may not have the equity needed for a cash-out refinance. With interest rates still near historical lows, the Renovation Loan is a great option to look at to refinance while adding value and building equity.
Other Renovation Loan Options
There are many options to look at when it comes to Renovation Loans. Contact your dedicated Mortgage Consultant with Cambria Mortgage to review your specific situation and discuss the right options for you.
Call Cambria Mortgage
To get started, call Cambria® Mortgage™ at 952-942-0110 today or visit CambriaMortgage.comOur team of experts will provide personal, hometown service with sound advice and impeccable attention to detail at every step of the process.