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Be a Fixer-Upper!  Renovation Lending

HGTV has helped millions of Americans get excited about the opportunity to purchase an existing home that is dated and fix it up with their personal touch.  Whether it’s as simple as paint and carpet, or as complicated as gutting rooms and moving walls, Weber Mortgage has all the resources you need to buy and renovate the home of your dreams!

 

Renovation Loan FAQ

  • Why would I need a Renovation Loan?

    • Renovation loans are used to fix up a property when you don’t have (or want to use) the cash to pay for the repairs yourself.  They can be used to purchase and fix up a property or they can be used to fix up a property that you already own.
  • Can I use a Renovation Loan to purchase a house?

    • Absolutely.  Renovation loans can be used to both purchase the property and finance the repairs or upgrades that you want to make.
  • Can I do the work myself?

    • This is a tricky question and the answer is ‘sometimes’.  This primarily depends on the renovation program you choose which will be determined by what kind of work will be done and how much money is needed to do the work.
  • What type of Renovation Loans are there?

    • Renovation loans can basically be broken down into two categories:
      • Conventional renovation loans are insured by Fannie Mae and Freddie Mac.
      • Government renovation loans are insured by HUD or the VA.
    • Renovation loans can also be broken down by the renovations themselves (type and cost):
      • Streamlined loans typically have only cosmetic issues that will cost less than $35,000 in repairs.
      • Full renovation loans includes structural issues or properties where the owner wants to do more than $35,000 in repairs.
  • What makes a renovation loan different than a typical loan?

    • Renovation loans give a Buyer/Owner money to do home improvements.  Typical loans do not.
  • Are Renovation Loans more expensive?

    • As a general rule: yes.  In lending, rates and fees are directly related to the risk of a loan and renovation loans are considered more risky.  Having said that, neither the rate nor the fees would be considered substantially higher.

 

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