RenoFi - Blog
Did you recently discover that a renovation home equity loan is the best way to fund your renovations? That’s great! That brand new kitchen you’ve been dreaming of is a lot closer than you think. You’ll also be happy to hear that the process of obtaining one is nearly identical to applying for a typical home equity loan; meaning you’ll enjoy the benefits without any extra hurdles to get there.
If you’re reading this article, then someone told you the best way to finance your home renovation is with a construction loan. Well, to put it bluntly, you’ve been given bad advice! We get it; you need a lot of money to turn all your home improvement dreams into a reality, and construction loans are attractive because they enable you to borrow based on what your home will be worth after the renovation.
In our previous post, we explained that renovation home equity loans are special because they are based on what the future value of your home will be AFTER the renovation. This key factor dramatically increases how much homeowners can borrow for their renovation. But there is more than one type of renovation loan out there - in fact there are actually 5 different primary options. At RenoFi, the first thing we help homeowners with is understanding which type is best for you.
This post gets into the nitty-gritty details of how construction loans work, from preparing your loan application all the way through project completion. We will cover 4 steps: Qualifying for a Construction Loan Preparing to apply Draw Schedule & Approvals Converting to a permanent mortgage Step 1: Qualifying for a Construction Loan We’ll review qualification in two parts: The Basics & Loan-To-Value. The Basics RESIDENCE TYPE: Construction Loans are for owners who are planning on living in the home (either primary residences or vacation homes).
Renovation home equity loans are the smartest ways for homeowners to finance their entire renovation projects. Yet most homeowners are completely unaware these exist & how they work. But don’t worry, by the time you are done reading this post, you’ll be in the know. What makes a renovation home equity loan so awesome you ask? There are two primary benefits: Unlike traditional home equity loans, renovation home equity loans are based on what the value of your home will be AFTER the renovation.
You and your spouse have started a family and bought a home within the last few years. You chose a family oriented neighborhood in a town with great schools. Because of this, the house wasn’t cheap. National Association of Realtors, US Existing Home Median Sales Price And most likely the home was pretty old, likely older than you. Don’t worry, you are not alone, in states like Pennsylvania & New York the average home is over 50 years old!