4 Simple Steps to Your Renovation with RenoFi

A renovation with RenoFi is simple, and we're here to guide you through it...

You have decided a renovation project is the best way to get a home you really love. And you know you need a loan, but perhaps what you don’t know is where to start. We know it can be overwhelming but take a deep breath. We are here to help guide you through the process!

Renovation loans

At RenoFi we break the renovation financing process into 4 simple steps that will walk you through the initial phase of getting your renovation off the ground. Here is what you need to know:

1. Get Pre-Qualified

The very first thing you’ll do is have a chat with our dedicated licensed RenoFi Advisor. With an understanding of your specific financial situation and renovation goals, the advisor will let you know which loan options you qualify for and which are the best fit for you.

Our advisor is happy to answer all your questions, so schedule your call today!

2. Prepare to Apply

Now that you’re pre-qualified, you are ready to dig in more. The next steps will require you to select your contractor, finalize your renovation plan, and gather your financial documents.

Contractor and Renovation Plans: Before making your decision, note that your contractor must be licensed and insured in the state you reside. You’ll need them to provide a detailed estimate with as much line item information as possible, as well as a formal contract to proceed. These items will not only be required to apply, but they’ll help you get a comprehensive understanding of the project’s budget in full.

Financial Documents: In order to prepare your application, you will also need to gather a few financial documents as well, such as proof of income and homeowner’s insurance. We’ve created a helpful online checklist so you don’t miss anything.

3. Get Matched with a Lender

RenoFi is not a lender. But we do make finding one easy. We know you could spend weeks contacting countless lenders for quotes to compare, so instead, we utilize our unique partnerships with the best local credit unions to match homeowners with the right lender for them. It’s our goal to find the best lender for your specific situation with the lowest rates and fees, so you can apply directly with them. This way, you’ll save you a lot of valuable time and continue to save money for years to come.

4. Start Renovating!

This is the fun part. And since you’re working with RenoFi, you can enjoy the process knowing you financed it all the smartest way possible.

If you’re ready to get started, so are we. Contact us today to get you one step closer to a home you love!

What You Need from Your Contractor to Apply

Earlier, we mentioned you need your contractor and renovation plans in order to apply for a RenoFi loan. And while no two contractor proposals or estimates are ever the same, there are some out there that just won’t cut it. But don’t worry, we’ll tell you exactly what to ask your contractor for, so you can make sure you have everything you need from the get-go.

The Contract

Contact Information: Contractor company name, phone number, website, and email, plus direct contact info of whoever is managing the renovation.

Change Order Procedures: What does your general contractor constitute as a change order? What happens if something out of scope is required during the renovation?

Payment by Progress Breakdown: Request a clear and fair payment breakdown based on the project’s progress. The complexity and size of your renovation can impact this structure, but RenoFi can provide helpful recommendations for your project.

Clear Construction Timelines: The projected completion date and what can be expected daily. What days of the week are workdays? What time will they start and finish each day?

Guarantee or Warranty: Your contractor should have a warranty on their work with info as to how long you are covered for, what the contractor agrees to fix if something breaks, and the timeframe in which the contractor will return to fix it.

Detailed Budget/Project Proposal

  1. Itemized breakdown of all materials Examples may include:

    • Square footage of the space to be renovated
    • Square footage of each flooring to be installed
    • Linear square footage of roofing to be repaired/replaced
    • Brand and specs of the new HVAC unit to be installed
  2. Itemized breakdown of labor This should be as detailed as possible. What will you need to supply versus your contractor? Who is obtaining the required permits? Etc.

  3. Architect/Engineer Plans (if applicable) Specifically for renovations involving multiple rooms or structural/foundation changes, or any project where the local building code requires engineering/architectural plans to be provided. However, RenoFi may require plans and specs for review on a case-by-case basis.

  4. Renderings Any renovation-specific documentation you can get from your general contractor is very helpful to the process, even though not required.

Will I Qualify for a RenoFi Loan?

So now you may be wondering if your application will be approved by a lender. In case there is any doubt, here are a few reasons our lenders have shared as to why homeowners don’t qualify:

1. Your FICO Score is Too Low- most lenders require a minimum of at least 660.

2. Your Debt to Income Ratio is Too High - the lower, the better. If your DTI (including payment for RenoFi loan is about 35%, you likely will not qualify.

3. The Loan for an Investment Property, Second Home, or Condo/Co-Op- unfortunately, RenoFi loans do not apply to these types of properties; only primary residences, including single-family detached and townhouses.

4. Your Property is in Texas - Sorry, there aren’t any lenders offering RenoFi loans here yet.

5. You’re Building a Home from Scratch - Since RenoFi loans don’t have the typical controls — like inspections and draws — that construction loans have, they only work for lower-risk projects.

6. Being your own licensed GC with 3+ Subcontractors - Your GC has to pass RenoFi’s due diligence for contractors, but if you are a GC by trade, you can use as many subcontractors as you’d like.

7. You have Unpredictable Income - If you work for yourself, have a fluctuating schedule, or are commission-based, then you’ll have a slightly harder time getting approved by a lender. You may have to provide some additional documentation to the bank.

8. Your Home is in the Advanced Stages of Construction- this doesn’t automatically disqualify you, but if you’re home is let’s say, demolished, then it’s likely to not be approved.

If none of these apply to you, then awesome! But if you’re not sure or have questions about applying, we’re happy to chat with you about the specifics of your project to get you started. Contact us today!

Find a Lender


Other information you may be interested in...

  • 3 Reasons You Shouldn’t Use a Cashout Refinance When Renovating - Refinancing can often be a dumb way to pay for your renovations. If you’re trying to lock in a significantly lower rate, you may be an exception, but for most homeowners, refinancing means throwing money away and getting less out of it. Let us explain. Here are 3 reasons why you shouldn’t use a Cashout Refinance when renovating.
  • What if My Contractor Refuses to Work with a Construction Loan? - Did you know contractors actually hate construction loans? Since these loans will typically cost your contractor more time and money, it’s hard to blame them. But when your contractor actually refuses to work with a construction loan completely, then what do you do?
  • The 6 Dumbest Things Homeowners Do When Paying for a Renovation - You’ll have a lot of decisions to make during your home renovation—how to pay for it is probably the biggest. That’s because making an investment in a home you love right now shouldn’t end up costing you for years to come. But too often homeowners make really bad choices when it comes to financing their project, and that’s exactly what happens.
  • Why Contractors HATE Construction Loans - You finally found a contractor, and you’ve started looking for a construction loan. Hold up! There’s something you should know: contractors HATE construction loans.
  • What do I Need from my Contractor to Apply for a Home Equity Loan? - Just like no two contractors are exactly the same, neither are their contracts or proposals. But in order for us to help put you on the best path to a home you love, there are a few submission requirements necessary in every contract and every proposal/detailed estimate from your contractor that you should know.
  • Other posts about Applying for a Loan
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  • Other posts about Renovations