What is a Renovation Loan?
A Home Renovation Loan is a mortgage that combines the cost of renovation or upgrades in with the cost of the home loan. This loan can help manage the high cost of home renovations, repairs, and remodeling with several flexible and affordable options to renovate your home dreams into reality.
It’s just one loan, one closing, and one payment for both the mortgage to purchase or refinance the home and the funds needed for improvements. Renovation Loans may open up a lot of doors for qualified home buyers to homes they may not have otherwise considered.
How do Renovation Loans work?
Renovation Loans are mortgages that bundle repairs or upgrade costs into the loan itself. It gives qualified home buyers more opportunities in a hot housing market when great homes that are available are harder to come across. They can find a home in need of updating at a lower price point and include the cost of repairs into the loan.
What are the benefits of Renovation Loans?
Renovation loans are great for qualified home buyers that are looking for anything from a full fixer-upper to a home that needs just a few upgrades. Home buyers can take advantage of a home at a lower price that needs some updating, expanding, or some minimal improvements and have the financial room to make it what they want
If you’re interested in learning more about renovation loans or you’re ready to start your journey to home ownership with a fixer upper, talk to your local On Q Mortgage Consultant.
Can I refinance my mortgage with a Renovation Loan?
Renovation loans can be refinanced and there are a few options that can suit a home owner’s needs including an FHA 203(k) Streamline Refinance loan. Qualified home owners have options available to them for refinancing and renovating their home. Contact a local On Q Mortgage Consultant to learn more about refinancing with a home renovation loan.
What types of Home Renovation Loans are there?
On Q Financial has an assortment of home loan renovation options to fit almost every repair or upgrade. From small repairs, repainting, and even larger upgrades including the addition of an extra room, we have options that will allow qualified home buyers to make their house into their dream home!
Some of those options include fixing or upgrading features such as:
Eliminating health and safety hazards
Repairing/replacing plumbing, heating, AC and electrical systems
Making changes for improved functions and modernization
Making energy conservation improvements
Creating accessibility for persons with disabilities
Installing or repairing fences, walkways, and driveways
Installing a new refrigerator, cooktop, oven, dishwasher, built-in microwave oven and washer/dryer
Repairing or removing an in-ground swimming pool
Installing smoke detectors
Installing, replacing or repairing exterior decks, patios, and porches
Eligibility for these renovations is determined by the type of renovation loan a home qualifies for. Contact a local Mortgage Consultant to learn about the eligibility requirements for certain homes.
Fannie Mae HomeStyle Renovation Program
On Q’s Fannie Mae HomeStyle Renovation Program is a great option for those looking to purchase that home that needs repairs or additions to become a dream home! Some requirements for the HomeStyle Loan Program include:
15 and 30 year fixed-rate options
Down payments as low as 3% on a 1- unit primary residence
Down payments as low as 10% on a second home
Primary, Second Home, and Investment Properties Allowed
Renovation Financing Can Total Up to 75% of the As-Completed Value of the property
Purchase and rate-and-term refinance options available
FICO scores as low as 620
What is an FHA 203(k) Loan?
On Q’s FHA 203(k) Renovation Loan Program is great for when a qualified home buyer is ready to purchase a home that might need some TLC. It can also be a great option for current home owners wishing to expand on their own home. Some requirements of the FHA 203(k) loan include:
3.5% down payment
640 minimum FICO credit score to qualify
2 years of tax returns
Verification of income
No late payments in the past 12 months
Contact an On Q Mortgage Consultant to learn if a Home Renovation Loan is right for you!
The following loan scenario is only an example. Actual amounts, fees, and rates vary depending on each individual borrower’s situation and additional factors. Loan example is based on a 30 year fixed FHA mortgage loan with 3.5% down. Amounts are based on a loan amount of $200,000, interest rate of 4.000%, APR of 5.033%, and down payment of $7000 as well as estimated additional funds due at closing of $3,927.55. Approximate monthly payment of $1,147.71. Loan Amount includes 1.75% upfront fee. Loan scenario does not include additional fees associated with monthly mortgage expenses such as HOA fee. All amounts shown are estimates and will vary for each loan. All figures are given for comparison purposes only and are not a commitment to lend or extend credit. Program availability is subject to change without notice. This is not an offer for extension of credit or a commitment to lend. Additional restrictions may apply. On Q Financial, Inc. is an Equal Housing Lender. NMLS 5645 OnQ1008190681Y000006f6HI