What are my renovation loan options?
Trying to find the loan option best-suited to your home renovation project? Here’s a guide to help you understand all of the different renovation loan options available.
Home renovation loans use the after renovation value of your home to determine how much you can borrow. This key factor makes them an attractive choice for many homeowners, because it often allows you to borrow more. Read more about how this works here.
Each type of home renovation loan is best for different types of situations.
If you know you want to factor in your home’s after renovation value to get a loan for your home remodel, but you’re not sure which loan type might be best, compare the different renovation loan options available in the table below.
|Renovation Home Equity Loan||Single-Close Construction To Permanent Loan (CTP)||Fannie Mae HomeStyle Loan||FHA 203k (Full)||Two-Close Construction To Permanent Loan (CTP)|
|Is this a mortgage?||Yes||Yes||Yes||Yes||Yes|
|1st or 2nd mortgage?||2nd||1st||1st||1st||1st|
|Require refinance of existing mortgage?||No||Yes||Yes||Yes||Yes|
|Typical Interest Rate||Market||Above Market||Above Market||Above Market||Above Market|
|Loan Limit (Renovation Cost + Mortgage)||$500,000||Jumbos allowed||Conforming only||$Conforming only||Jumbos allowed|
|Loan Term (max)||20 years||30 years||30 years||30 years||30 years|
|Credit Score Required||660+||700+||620+||580+||580+|
|Loan to Value||Up to 95%||Up to 95%||Up to 95%||Up to 96.5%||Up to 80%|
|Can be used for building new home?||No||Yes||No||No||Yes|
|Restrictions on type of improvements?||No||No||No||Yes||No|
Still not sure which loan option is right for you? Check out What is a Home Renovation Loan to get a more in-depth picture of each loan option.
How do I know if a RenoFi loan is right for my project?
The RenoFi team is standing by to help you better understand how RenoFi Loans work and the projects they are best suited for. Have a question - Chat, Email, Call now...