Abilene Renovation Home Loans

Those looking to buy or sell a home in Abilene can benefit from a home renovation loan. Also referred to as a rehab or home improvement loan, renovation loans give buyers the freedom to buy a house and alter it to their liking. They also allow sellers to avoid the additional expense of repairing their homes before listing them for sale.

Are you interested in a home renovation loan but unsure of your borrowing options? Let’s discuss how home improvement loans work, the types of projects you can use them for, and how to get them.

What is a Rehab Loan?

You can use a rehab loan to finance various home improvement projects. It’s not a type of loan per se but the purpose for which borrowers plan to use the funds from the loan.

A rehab or home renovation loan can help you pay for any significant home improvement project you want/need to tackle. You can use one to pay for anything from purchasing and renovating a fixer-upper to a simple room makeover. These funds can also be used to pay for necessities that improve your quality of life, such as repairing a leaking roof or replacing an outdated HVAC or plumbing system.

Home Renovation Loan Options in Abilene, TX

Transform an older home into your dream home with structural and cosmetic improvements. These home renovation loan programs will help you get more for your money when purchasing a home:

     1) FHA Rehab Loans

FHA rehabilitation loans, also known as 203(k) loans, are designed for homebuyers who wish to acquire and renovate homes requiring substantial work. This FHA-backed loan considers the property’s after-improvement value and funds the renovation costs as part of your primary mortgage.

The FHA 203K Standard can be used to finance both significant home repairs and aesthetic upgrades.

The FHA 203K Limited is a downsized version of the FHA 203K Standard. It is less difficult to obtain, but it only covers non-structural repairs and is capped at $35,000.

     2. Freddie Mac CHOICERenovation Loan

Freddie Mac’s CHOICERenovation® loan is a conventional loan program that lets you finance the purchase of a home and the cost of renovations with a low down payment.

     3. Fannie Mae HomeStyle Loan

Qualified borrowers can buy or refinance a home and pay for necessary repairs with the help of the Fannie Mae HomeStyle® Renovation loan. This option only requires a 3% down payment from first-time buyers.

     4. Home Equity Loan

If you need money to pay for renovations to your home, a home equity loan is another viable option. It is also known as a second mortgage. Simply put, a home equity loan allows you to use the equity you’ve built up in your home as collateral for a new loan without having to refinance your existing mortgage.

     5. Personal Loans

A personal loan can finance almost any expense, including home improvements. Because it is an unsecured debt, its repayment is not contingent on the value of your home, which is advantageous for homeowners. 

If you have a credit score of 650 or higher, a personal loan may be the best option for you, but you may be subject to higher interest rates and shorter repayment terms.

When is a Rehab Loan the Right Choice?

Under the following circumstances, a rehab loan may be your best option:

• You are looking into various home improvement options.

• You wish to renovate a room or section of your current home or the home you intend to buy.

• You want to remodel your home to accommodate your lifestyle or your family’s needs.

• You want to add more rooms to your house. 

Ready to Begin Your Abilene Home Renovation Loan?

Capital Home Mortgage will gladly help you find the right renovation loan for your needs if you’re interested in purchasing a fixer-upper. We are a full-service mortgage company that offers a comprehensive range of mortgage products, from conventional and government-backed loans to the renovation loans mentioned above.

As a direct mortgage lender in Abilene, TX, we have complete control over the entire process, from application to closing. We are committed to making home loans a much easier and more enjoyable experience for our clients!

We’ve built a solid reputation for assisting Abilene homebuyers and homeowners in obtaining home loans that meet their needs, and we’re eager to put our expertise to work for you. For more information on our Abilene renovation loans, please get in touch with one of our home loan experts at (325) 387-8387.