Located in a beautiful suburb of southeastern Pennsylvania, filled with a variety of eclectic shopping and dining options, was an old farmhouse that lacked contemporary features. But considering its great location and unique charm, it’s no wonder the owners were willing to put in the work. Their vision of turning this antiquated property into their modern dream home, however, would require a significant investment.
This story has a happy ending — all thanks to a RenoFi fixed HELOC. If you’re about to embark on your next interior renovation project, continue reading to learn more about this homeowner’s journey and see how RenoFi can also help you!
About the Renovation Project
In order to transform their beautiful old farmhouse into their dream home (and up to modern standards), this renovation project required a pretty large scope. Here’s what was involved:
- Completely gutting and renovating the kitchen, laundry, and dining room areas
- Adding central air to the home
- Restructuring a small bedroom into a larger one, including a new closet and deck
- Building a 3-car garage
When it came to the kitchen, the homeowner was looking for a more open concept than that home’s traditional layout; one that would flow freely to the dining room. They also wanted to update the powder room, laundry room, and mudroom facilities to ensure they would function properly in the coming years.
Lastly, since the home didn’t have a basement, the homeowner wanted to add a large second level to the garage to create an alternative storage and hangout space.
Securing the RenoFi Fixed HELOC
With today’s uncertain economic market, it was a major advantage to the homeowner to find a loan that’s interest rates wouldn’t fluctuate depending on the day-to-day market conditions while they were paying it back.
While banks traditionally offer HELOCs with variable rates, a RenoFi fixed-rate HELOC allowed this homeowner to turn their HELOC balance into a fixed-rate loan once they started to draw from their line of credit.
In order to qualify for this type of loan, they had to show proof of their good credit score, tappable equity, stable income, and a debt-to-income ratio (DTI) of 43% or less. While their peak combined-loan-to-value (CLTV) ratio was 110.01%, their after repair value (ARV) CLTV was 89.60%, minimizing their risk factor in the eyes of lenders and allowing them to secure the loan.
They also benefited from a higher borrowing power using their home’s after renovation value (ARV). While the max amount they could borrow based on current home value was only $245,628, they were able to increase their max loan amount to $323,928 based on their ARV. That being said, their renovation cost versus their current value ratio was 37.31%.
Are you wondering if you would be eligible for a RenoFi fixed HELOC? Check out some of these homeowner’s statistics to see how you compare:
- DTI Score: 31.3%
- Credit Score: 715
- Monthly Income: $21,084
The homeowner’s outstanding mortgage balance of $351,000. They had a monthly debt of $6,600 but about $397,000 of assets. Knowing this background information, the homeowner was able to qualify for the following rates:
- As low as rate of 4.250%
- Actual loan rate of 4.25%
Renovation Value Tops $200,000
With the help of RenoFi, this homeowner was able to see huge returns on investment. While their loan was valued at $243,000, the renovation only cost them $201,475 when all was said and done. As a result, their appraised current home value of $540,000 increased to $663,000 thanks to their new renovations. Here’s the full breakdown:
- Estimated after renovation value: $675,000
- Actual after renovated value: $663,000
- Estimated ROI: 62.04%
- Renovation ROI: 61.05%
RenoFi loves helping homeowners make their renovation dreams come true — from a single project to major interior home renovations. No matter the scope of your next project, contact us to learn how we can help you! We can’t wait to get started.
The most money and lowest monthly payment for your renovation
Borrow up to 90% of your future home value with a RenoFi Renovation Loan
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