If you want to make upgrades on your home but are short on funds, there might be another way for you to get the money you need.
A renovation loan is perfect for buyers who want to:
- purchase an older home and want to make it modern,
- purchase a newer home but want to customize it to fit their tastes,
- want to make finance appraiser required repairs, or
- need extra money for minor repairs to complete remodels.
Your home doesn’t have to be dated to qualify for a renovation loan (although it’s fine it if is!). Whether your home looks like it could be out of a different decade or you have a new home that you want to make some changes to, a renovation loan could be perfect for you.
To qualify for a renovation loan, borrowers must obtain a detailed improvements bid from a licensed and insured contractor. (The borrower cannot complete the work!) A HUD consultant may also need to be contacted, but that is primarily for structural improvements or large projects.
An appraisal will then need to be conducted to determine the total value of the improvements, and any suggestions from the appraiser or HUD consultant will need to be added to the bid given by the contractor.
Both the property and the borrower will be reviewed during underwriting. If both qualify, the process will be similar to traditional mortgage loans. There will be a purchase/renovation closing, then the seller will be paid prior to starting renovations, a renovation escrow account will be set up, and then the contractor can begin work.
There are many variations of a renovation loan, and choosing the right one depends on your profile, the type and number of renovations required, and more. The best way to find out which loan is right for you is to contact a qualified lender and discuss options based on your exact situation.
Visit https://www.ovmfinancial.com/renovation-loan to see a chart of all of the various renovation loan types, and contact our preferred lender Chet Mann at OVM Financial to find out more details about any of them.
For information about buying and selling a home in Moore County, call a member of The Home Team NC at 910-684-3339 or email us at [email protected]. For daily tips and helpful real estate information, Like and Follow us on Facebook: The Home Team NC.