Home Renovation Loans In Fort Worth

A home renovation loan is a loan that provides funding for upgrading, remodeling, and repairing a home. It is frequently a mortgage with extra funds for house upgrades. There are different use and programs for a home renovation. It could be a purchase loan with additional funding for renovations. Refinance your current mortgage with a cash payoff for home upgrades could be an option. A government loan, such as a Fannie Mae HomeStyle loan, a Freddie Mac Choice Renovation loan, or an FHA 203(k) loan, could be used.

Why a Home Renovation Loan?

A home renovation loan is worth considering if you don’t have enough funds to finance upgrades or repairs. It’s also worth looking into if you have your heart set on a home that has a modest asking price but requires extensive maintenance.

These loans can significantly help homeowners or purchasers who want more control over growing home equity by making significant improvements, not handyman labor. A home remodel loan can be a valuable tool if a project would increase the property’s value after a home improvement.

Types of Home Renovation Loans

• FannieMae Homestyle Renovation Loan

Borrowers can use the Fannie Mae HomeStyle Renovation loan to either acquire a home that needs repairs or refinance their existing home loan and get money for modifications. The loan proceeds are deposited into a separate escrow account used to pay contractors. Borrowers cannot access such money as they would with a home equity loan or cash-out refinance.

A HomeStyle loan has a single monthly payment; you don’t have to take out a loan for the mortgage and repairs. Borrowers can use it to renovate vacation homes or investment properties. Any renovation or repair is acceptable if it is permanently attached to the property.

• FreddieMac Choice Renovation Loan

Borrowers can use this loan to buy a home that requires repairs or to refinance their existing home and incorporate the money for renovation in the new loan amount. The loan amount is determined by the home’s “as-completed” value rather than its current value. This loan program allows for repairs up to $200,000 on 1-4 primary residence homes or 1-unit second homes.

• FHA 203(k) Loan

The FHA 203(k) loan is a government loan that can finance the purchase of a home and renovations under a single mortgage loan. There are two types of FHA 203(k) loans: (a) standard, which allows for repairs over $35,000, and (b) limited or streamlined, designed to finance home improvements under $35,000.

The FHA 203(k) loan covers a wide range of acceptable upgrades, including repairing a roof, flooring, and plumbing, reducing safety and health risks, and upgrading to accommodate a disabled person. However, borrowers cannot use this type of loan for a luxury renovation, such as constructing a backyard swimming pool or hot tub. It is only available for primary residences, not for second or vacation homes.

Apply for a Home Renovation Loan

Due to the current housing situation, It is an excellent time to apply for a home renovation loan. Home Renovation Loans not only improve your borrowing power based on the after-renovation valuation of your property, but they also feature lower interest rates and monthly payments than practically any other option.

Call our home renovation experts at (800) 850-4255 or apply online to get prequalified and preapproved for a home renovation loan in Fort Worth.