Have you looked at homes you love with the perfect layout and location but it was completely outdated? Do you live in a home with these characteristics or needs major repairs? The hesitation to move forward with that purchase or repair is due to high interest on credit cards or a HELOC, or you simply do not want to take it out of your savings or investments. You’re not alone! Many Americans are and have been in the same situation which is why the HomeStyle Renovation mortgage was created.
Renovation loans give you flexibility. Whether you are buying a new home or refinancing your current home, a renovation loan allows you to add a room(s), remodel, add a pool, and/or upgrade or repair many things. The repairs and upgrades allowed are much more flexible than the FHA 203K program.
Save by financing renovation costs into your mortgage rather than racking up credit card bills or dipping into your savings. With one loan, there’s only one application, one set of fees, one closing, and one monthly payment. Improvements may include repairs and renovations that adds value to your home, including a garage, swimming pool and energy-efficiency upgrades.
How does a HomeStyle Renovation loan work?
You take out a mortgage for the full purchase price plus renovation costs minus your down payment if you’re purchasing a new home. If refinancing your existing home, the program would pay off your existing mortgage(s) and add the renovation and closing costs up to the max LTV (loan-to-value) allowed based on the occupancy and type of home. For primary one-unit residence, the LTV can be as much as 95%. That means for example, you can have a purchase price of $400,000 and renovation costs, reserves, closing costs, and escrows of $200,000, and only have to contribute $30,000 down of your own funds – assuming you qualify and the home appraises for at least $600,000. The best part is that the value is based off of the final renovated home, not the as-is current market value!
The max LTV is 90% for vacation or second homes, and 75% for investment or rental homes. The max loan allowed follows conventional loan limits for each county.
Get Pre-Approved for a HomeStyle Renovation Loan
If you would like to learn more and are looking to renovate a home in Troy, Oakland County, Michigan, or anywhere in the United States, contact Alex Kandah and his team at Bank of England Mortgage Troy at (248) 633-8555, firstname.lastname@example.org, or simply fill out the form on this page for prompt, professional, honest guidance.