Searching for a new home can be a daunting task, especially in a competitive or low-inventory market. In these cases, many homeowners will make a purchasing decision based on the opportunity to renovate or upgrade the home as soon as they move in. But if you’d rather not wait for closing to take the first steps in financing your project, RenoFi can help.
Thanks to a RenoFi Fixed Rate Home Equity Loan, this homeowner was able to finance their entire interior renovation project before they ever moved in. If you’re still finalizing the details on the purchase of your new home, find out how RenoFi can help you right now.
Qualifying for the Loan
Our homeowners knew they wanted a home in the beautiful borough in Chester County, Pennsylvania, just west of the city of Philadelphia. Unfortunately, they didn’t quite feel the same passion about the home they bought there. With plans to renovate the kitchen, patio, bedrooms, and bathroom, they were determined to turn it into a home they love — they just needed the financing to do it before they moved in.
When they reached out to RenoFi to explore their options, the homeowners learned how a RenoFi Fixed Rate Home Equity Loan would offer them the peace of mind of a fixed rate during the entire length of the project, which was projected at 6-7 months. It also meant they could take advantage of greater borrowing power to tackle all the items on their wish list at once without needing to refinance their existing mortgage.
The property’s current value was listed at $415,000, but it was later appraised at $430,000. With a FICO score of 802 and a DTI score of 53.90%, the homeowners qualified for a rate as low as 4.38%. While the project’s actual start date was in October 2021, they closed with the lender in December 2021, securing a fixed rate loan of $80,000.
Current Value vs. After Renovation Value
By the end of April 2022, the homeowner received their certificate of completion. When all was said and done, their home’s previous appraised after renovation value was $525,000 — increasing their home’s existing appraisal value by $95,000! Thanks to a RenoFi Fixed Rate Home Equity Loan, the homeowners experienced an 89.29% renovation return on investment.
A further breakdown of what the homeowners qualified for and the value it provided are below:
| Description | Value |
|---|---|
| Stated current home value | $415,000 |
| Actual current home value | $430,000 |
| Renovation value | $106,400 |
| Estimated after renovation value | $550,000 |
| Actual after renovation value | $525,000 |
Are you interested in learning how RenoFi can help you achieve a greater ROI on your next renovation project? Explore rates and monthly payments on our RenoFi fixed rate home equity loans, or contact us today to get started!
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