Buying a home that needs a little work? Or ready to give your current house an upgrade? A home renovation loan lets you roll the cost of repairs and remodeling into your mortgage, giving you one simple loan with one monthly payment.
How a Renovation Loan Works
Unlike a standard mortgage, a renovation loan is based on your home’s “after-renovation value.” That means you may qualify for more financing than the home’s current condition would allow — giving you the funds you need for upgrades, repairs, or even major remodels.
Benefits of Renovation Loans
- Convenience – Combine purchase (or refinance) and renovation costs into one loan.
- Flexibility – Finance projects of any size, from cosmetic updates to full-scale renovations.
- Affordability – Enjoy competitive mortgage rates instead of high-interest credit cards or personal loans.
- Value Growth – Renovations may increase your home’s market value.
- Expanded Options – Consider homes in need of TLC that might otherwise be overlooked.
Frequently Asked Questions (FAQs)
Q: Can I use a renovation loan for my current home?
Yes — renovation loans can be used when refinancing your existing mortgage to cover the cost of upgrades.
Q: What kinds of improvements can I finance?
Almost anything: kitchens, bathrooms, flooring, roofing, energy efficiency upgrades, structural repairs, or even room additions.
Q: How much can I borrow?
The amount is based on the appraised value of the home after improvements are completed, which often increases your borrowing power.
Q: Is this better than a home equity loan?
It depends. Renovation loans provide financing upfront based on future value, while home equity loans require existing equity. Many buyers and homeowners prefer renovation loans when equity is limited or when purchasing a fixer-upper.
For additional information call Adam Consiglio at 575-425-1010.