How Do Renovation Loans Work?

Advantages of Financing Repairs Through Your Mortgage

Gateway Mortgage Group has loan options that allow you to include the costs of repairs or renovations in your mortgage – either your current mortgage or the one for a home you’re planning to buy.

Convenience: A single loan covers the cost of your repairs plus the cost of your home. That means one loan, one closing and a single monthly loan payment.

Speed: Immediately following closing, repairs can begin. The funds are ready to be put to good use.

 

Renovating Your Current Home

You may be able to improve the value and equity in your current home through repairs and renovations. The number of repairs or renovation you need can guide you in the type of renovation loan you’ll consider. Some of the reasons you might renovate, both big and small, include:

  • New Construction: Add a room or even a second floor
  • Structural: Repair the foundation or other major structures
  • Roof: Replace or repair the roof and/or gutters
  • Windows/Doors: Replace windows and doors for aesthetic purposes or to improve your home’s energy efficiency
  • Insulation: Replace or add insulation to save on energy costs
  • Systems Upgrade: Replace or upgrade electrical, plumbing or heating and cooling
  • Floors: Replace flooring
  • Redesign: Modernize your kitchen or bath
  • Landscaping: Improve your home’s exterior

 

Why Purchase a Fixer Upper?

There are distinct advantages in purchasing a home that needs repairs, including:

  • Homes requiring repairs may offer significant savings. As a result of the discounted price, you might be able to move into a great school district, or a more expensive area or a larger home than you could otherwise afford.
  • Being open to a fixer-upper widens your search options.
  • By including the cost of renovations in the purchase price, you’ll be able to customize parts of the home to your tastes.

 

Get Smart About Fixer-Uppers

Fixer uppers can translate into savings, but not always. Consider these points when deciding on the purchase of a fixer-upper:

  • Home Inspection: A careful inspection by a professional will give you a clear picture of how much work needs to be done to get the home in good shape. This step is essential.
  • Repair Costs: Get a written estimate of repairs and renovation costs from a professional contractor. Make sure they see the inspection report and the home.
  • Handling Repairs Yourself: If you intend to do some of the repairs yourself, be sure you estimate the cost of supplies.
  • Zoning Restrictions: Check to see if local zoning regulations will limit the renovations you plan to make.
  • Get a Price Reduction: A seller of a home in need of repair should offer you a significant discount on price, depending on the amount of work needed. If you’re not seeing a reasonable break on the price, consider whether the investment of money and time is worth it before pursuing financing.

 

For more information about our Renovation and Construction Loans, Go Here or Contact a Local Branch today!