What is a Renovation Home Loan?

Renovate A House Into Your Dream Home

Finding the perfect home in today’s competitive market can be difficult. To broaden your options, you can consider purchasing a fixer-upper and renovating it to match your tastes. A renovation home loan allows you to get the financing needed to buy a new property and the funds you need to make the renovations and/or repairs on the home. Even better, it's all rolled up into one affordable monthly mortgage payment.
Don’t want to leave your current neighborhood? Consider financing renovations around your current home to increase its value - without draining your savings. You can refinance your current property and include the cost of your upgrades in the new loan amount.
You don’t need a major renovation to utilize a renovation mortgage. You can use them for structural repairs, cosmetic renovations, and general improvements. You also benefit from having a professional to do the work so you know it was done correctly and can get it done in a timely manner. 
Some of the most common uses for renovation loans are remodeling and updating kitchens and bathrooms. That means you can have those beautiful granite countertops and high-end fixtures you’ve always wanted. But you can also replace your old windows with more energy efficient options, fix structural damage, get that new roof you’ve been needing, or fix electrical issues.
Live somewhere warm? Consider putting in a new swimming pool or deck to enjoy the weather. If you can dream it, Certainty Home Loans can help you finance it. 

Benefits of Renovation Mortgages

  • Combines the purchase price of the home with the cost of the improvements.
  • Allows you to roll everything into a monthly mortgage payment instead of having to make a large payment for the renovations all at once.
  • Gives you the ability to hire professionals to do the work so you can focus on other things.
  • Transforms an outdated house into the dream home you’ve always wanted, and often increases the value of it.
The Renovation Mortgage Process
Certainty Home Loans has a dedicated team of Renovation Specialists that are here to assist with the entire loan process. They will help you navigate each step.
  1. Get pre-qualified – Use our Digital Mortgage to see what loan amount you can pre-qualify for. You will work with your Loan Officer and Renovation Specialist throughout your renovation journey.
  2. Find the perfect location – Find your ideal home to renovate. Remember, it doesn’t have to be perfect. After the renovation, your home will be exactly what you want.
  3. Make an Offer – Negotiate the best price you can to purchase the house in its “As-Is” condition. The difference in pricing will give you more room for renovation costs.
  4. Define the Renovation & Meet Your Contractors – Set up an appointment with your HUD consultant and/or contractors to review your project and determine the cost of the repairs that will be required, and the cost of what you would like to have done. Your Certainty Renovation Specialist will help along the way.
  5. Appraisal Completion – Your Loan Officer and Renovation Specialist will be working behind the scenes to order your appraisal as soon as they have the contractors’ information, scope of work and cost estimate. The appraisal will be based on what the house will be worth after the renovations are complete.
  6. Processing & Underwriting – This is the typical mortgage process of verifying all of the information provided. You may be asked to provide additional documentation - but don’t worry, we just have to make sure the “i’s” are dotted and the “t’s” are crossed.  During this time, review your appraisal and final renovation budget with your loan team and prepare for closing.
  7. Closing – Review, sign and return your Closing Disclosures, which you will receive at least 3 days before closing. Sign your Closing Documents on the day of closing. Your Renovation funds are set aside in an interest-bearing escrow account.
  8. Renovation Begins – Renovations need to start within 30 days of closing and must be complete within 6 months. Your Renovation Specialist will work with you and your contractors to make sure everyone understands the construction draw processes, and that you contractor is paid timely for work completed.
  9. Final Inspection Completion – After all work is completed, the renovation escrow will be closed and a final inspection is conducted to ensure that all renovations have been completed as proposed. Your contractor will provide all final inspection records to document that everything was completed and are up to code.
  10. Enjoy Your New Home – Congrats! Your new home is ready for you to enjoy what you have created. 
Are you ready to speak to a Loan Officer about a renovation mortgage? Find someone in your area and learn more.
- Dec 07, 2020