Finding an affordable home in a highly-desired neighborhood is not an easy task. That’s why many home buyers will consider a home located in the area they love but isn’t quite what they would call their dream home — knowing they can renovate. And in today’s tough market, that’s happening a lot. In this specific case, the buyers wanted to do an entire home renovation on a million-dollar property in a highly-desired coastal city in Orange County, California.
Thanks to a RenoFi Fixed Rate Home Equity loan, that was more than doable. Even better, the homeowner achieved major increases in the after-renovation value and received a large return on investment. So now, we’re sharing their story.
If you’re interested in renovating your home (no matter how large or small), continue reading this case study to discover how a RenoFi loan worked for them — and how RenoFi can also help you!
The RenoFi Loan’s Value
After finding a property in beautiful Seal Beach, California, this homeowner began to renovate — in a major way. With their home valued at $1.3 million upon purchase and then appraised at $1,432,400, the homeowners were looking at a renovation value of $619K to accomplish everything on their wish list. With a FICO score of 763 and a DTI score of 46%, they could qualify for a rate as low as 6% for a loan valued at $250K.
Having a loan based on the after-renovation value was a big help in boosting their borrowing capabilities to cover the costs. But with a home of this price point, it was huge for a number of reasons. The after-renovation value of the $1.4 million home shot up to $1.8 million, adding over $300K to the home’s value. With the ability to borrow up to 90% of this new value, it translated into significantly stronger borrowing power and no refinancing necessary!
Even further, loans over $250K will typically have stricter qualification criteria, but this homeowner got the $250K they needed with their RenoFi loan. Not to mention the fact that using this loan for a home improvement didn’t require any draws and inspections, while all proceeds are made fully available to the borrower to use at any time throughout the construction process.
The Home’s After Renovation Value
With an official project start date of April 2020, the homeowners received their certificate of completion at the end of September 2021. Remembering their original appraised home value of $1.4 million, their appraised after renovation value was $1.8 million— meaning a 43.23% renovation return on investment!
Here’s the full breakdown of the project by the numbers:
|Debt to income score||46%|
|Actual loan rate||6.00%|
|Original value of home from appraisal||$1,432,400|
|Actual after renovation value||$1,700,000|
RenoFi would love to work with you! We can hlep you finance your next renovation project, no matter the size of your home. From a new bathroom, ADU addition, or whole home renovation, start planning your project today by exploring rates and payments on our RenoFi fixed rate home equity loans, or contacting us to talk to a renovation advisor today!
The most money and lowest monthly payment for your renovation
Borrow up to 90% of your future home value with a Renofi Renovation Loan
I WANT TO RENOVATE: