Skip to main content

How do Renovation Loans work?

How do Renovation Loans work?

Annette Bui | Updated July 05, 2020 | Mortgage Programs 101

The purpose of renovation loans or 203k is that it allows both homeowners and homebuyers to build the cost of doing a rehabilitation project on a house and roll it into the mortgage. The benefit of this program is that it makes the upgrade process more affordable without having to incur expensive credit card interest and maxing out your debts. You can finance the cost into your mortgage at a lower interest and have a fixed payment. Additionally, the projected renovation updates will improve the value of the collateral and better secures the lender's position. This is designed to help save both time and money for homeowners to gain access to more prospective homes rather than be limited to the homes already in good condition.

How can a Renovation Loan be used?

The scope of the rehabilitation loan covers expenses of a minimum of $5,000 in costs and up and can be used for virtually any upgrades to improve the home down to as much as getting it partially demolished or razed as part of the rehabilitation as long as the current foundation is in its original place. Furthermore, rehab loans may extend to the costs to convert the property to a one to four-unit home.


What’s Next?

The next step to finding out if a renovation loan is a good option for you is to assess what upgrades you may need and reach out to Annette’s team to see how much you can get preapproved for. As part of our promise to clients, we believe that homeownership is an ongoing process that not only entails the initial process of acquiring your home but also building the perpetual relationship so we can always be available for your annual financial assessment or provide any guidance, educate and collaborate with our clients.


Popular posts from this blog

Get in Touch!

Happy to serve you and your family! Please feel free to call/text or email and check out my resources!

Simple ways to determine if it is WORTH it to refinance!

Simple ways to determine if it is WORTH it to refinance!   Annette Bui | Updated March 21, 2019 | Lifestyle   Why would people consider refinancing? Will your interest rate be the very first reason? I genuinely believe you 'd like to be able to save at least half a percent or at least $150 a month if you want to refinance. The reality is that when you refinance, the costs could range from 2-4 per cent anywhere, so you really want to make sure that the savings have a substantial benefit. Consider the Payoff benefit. Will you be there for 5- years? Or maybe even extended refinancing?  If you are going to be there for a very long time, then it will make sense because you will get a substantial amount of money over the duration of your loan that is equivalent to thousands of dollars. Do you know the substantial net savings benefit? Yeah, when you do a refinancing threes two forms of costs incurred, reoccurring expenses are like your taxes and premiums and fees, so you can get i

Down Payment Assistance