A home remodeling project can be a long and costly process. However, with the right planning and execution, you can pull this off without a hitch. In this blog, your semi custom home builder, Sadler Building Corporation, shares three ways you can finance your home renovation project. Read on to learn more.
Why Consider a Home Renovation Loan
We all know that a home renovation project can be costly and it’s understandable that people may not have the cash to finance the project from the get-go. Thankfully, there are multiple loan types that can be availed of to make your dream home a reality. We’ll be listing some of them and what they entail down below.
1. Home Renovation Loan. One of the more recent types of loans to emerge, the home renovation loan is an equity loan that factors in the home’s anticipated value after the renovation project. It then uses its predicted value to calculate the CLTV (Combined-Loan-to-Value) ratio. While it’s fairly new, it’s a great option for homeowners since it doesn’t require them to refinance their initial mortgage. They’ll have to pay even less due to the smaller base. It also features one of the lowest rates for a 10-15 year term.
2. Fannie Mae HomeStyle Loan. This is a government-backed loan that requires a minimum credit score of at least 620 and a 5% downpayment. It can cover as high as 75 percent of the home’s value along with miscellaneous remodeling costs. It’s a convenient option for homeowners since it can be applied to any remodeling project, whether it’s for your bedroom, kitchen, or your exterior. Plus, you’ll only sign one set of documents and pay off a single set of closing costs.
3. FHA 203(k) Loan. The FHA 203(k) loan is a good option for homeowners with limited collateral and an adequate credit score. They can avail of a mortgage with a credit score of 620 with as little as a 3.5 percent down payment. It can be used for a myriad of renovation projects as well that gives the homeowner great control over their budget.
Searching for the premier custom home builder in your area? Call on Sadler Building Corporation! Since 1987, we are committed to building distinctive homes with innovative designs. Let us build your dream home for you! Call us at (757) 977-1041 or fill out our contact form for a free quotation. We serve customers in Chesapeake, VA, and the rest of Virginia.