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Picture this: you’re house hunting and find a home for sale in your ideal neighborhood with an easy commute to work. The listing price is lower than some others you’ve investigated because the home is older and in need of improvements. Maybe its kitchen is outdated and too small for your needs, or the exterior needs more energy efficient upgrades.
Before walking away, consider the various benefits of renovation loans.
If you were only considering move-in ready homes, deciding to purchase and renovate can increase the pool of homes available to you. With the ability to fix things up or make upgrades, homes that you may have previously passed over now have potential. Some houses that require upgrades or renovations may even be available at a reduced price when compared to move-in ready homes.
Renovation loans use a home’s estimated after renovation value instead of its current appraised value to calculate how much a homeowner can borrow. This means you can borrow the funds to purchase the home and your planned renovations all in one loan. This also helps you save on closing costs that would occur if you were taking out a purchase loan and a home equity loan for the repairs separately.
Depending on what renovation program you choose, you may be able to increase your home value and curb appeal from renovations while also building equity in your home. Accruing equity more quickly means you may get the opportunity to refinance more quickly.
While limitations will depend on the renovation loan product you choose, they still allow you ample freedom to customize, make additions, and dream big. From major projects like room and level additions to smaller projects like painting or adding a pool, the choice is yours!
At Homestead Funding, we understand that every financial situation and home need are different. That’s why our Loan Originators and loan programs are equally unique. When you’re ready to customize the home of your dreams, contact us today!
McGlone Mortgage Group offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.