Home Renovation Loans In Lubbock

Homeowners and buyers who want more significant influence over their equity growth through renovations can benefit from a home improvement loan. If the work on a house would raise its resale value, a loan for that purpose may be a wise financial move.

What is a Home Renovation Loan?

A loan designated to renovate, remodel, or repair a home is known as a home improvement loan. Most of the time, it is a mortgage with additional funds to improve the home. The term “home remodeling” can refer to various uses and initiatives. It could be a loan for the acquisition of the property along with additional cash for the improvements. It’s possible that you could save money on home improvements by refinancing your current mortgage in exchange for a cash payout. It is also possible to use a loan from the government, such as a Fannie Mae HomeStyle loan, a Freddie Mac Choice Renovation loan, or an FHA 203(k) loan. All of these loans have different terms and requirements.

     – FHA 203(k)

The FHA 203(k) loan is a single mortgage loan from the Federal Housing Administration (FHA) used to finance both the acquisition of a home and its subsequent modifications. There are two different kinds of FHA 203(k) loans: (a) the standard 203k, which can be used to pay for renovations costing more than $35,000; and (b) the limited or streamlined 203k, which is intended to fund renovations costing less than $35,000.

For a property to qualify for financing under this HUD program, it must meet specific requirements for energy efficiency and structural soundness.

     – Fannie Mae HomeStyle Renovation

The HomeStyle Renovation Mortgage allows borrowers to finance home improvements with the purchase or refinance of an existing home. The HomeStyle Renovation Mortgage enables borrowers to finance up to 75 percent of the property’s appraised value with a first mortgage as opposed to a second mortgage, home equity line of credit, or other more expensive financing strategies. Individual homebuyers, investors, charitable groups, and local government agencies are eligible borrowers. A credit score of 620 is required.

     – Freddie Mac ChoiceRenovation

Freddie Mac Choice Renovation loans allow borrowers to finance the purchase or refinancing of a home and make improvements to the property using a single loan. This mortgage product allows you to borrow against the future value of your property, which, compared to a standard home equity loan or line of credit, gives you a more significant amount of borrowing power.

Regarding CHOICERenovation mortgages, Freddie Mac has no specific restrictions for a borrower’s credit score or debt-to-income ratio. You will be required to meet the requirements for any other conventional mortgage Freddie Mac offers.

Apply for a Home Renovation Loan in Lubbock

Get prequalified and preapproved for a home renovation loan in Lubbock by submitting an application online or calling our home renovation experts at (806) 589-3428.