A Cost-Effective Way to Renovate Your Home
Are you looking to purchase a home that needs renovation? Or, do you need to fund renovations on your current home? A HomeStyle® Renovation Mortgage can help meet your needs. The HomeStyle Renovation Mortgage is a cost-effective and convenient way to combine home purchase or refinance with the cost of renovating or repairing your home in one loan with one closing. What’s the benefit? Instead of financing the renovation with a second mortgage or home equity loan, you get the lower interest rates of a first mortgage and only have to pay for one mortgage closing.
And with a HomeStyle Renovation Mortgage, you can borrow an amount based on the value of the home after the renovations are finished, so you know you will have the funds available to do the job right.
Is This Mortgage Right for You?
If these situations describe you, a HomeStyle Renovation Mortgage might be a good fit:
- You seek a cost-effective way to renovate or improve a home.
- You want the efficiency and cost savings of one mortgage closing.
- You desire flexibility and peace of mind with your home financing.
How a HomeStyle Renovation Mortgage Works
A HomeStyle Renovation Mortgage is available to buy or refinance a home (with up to four units) that you will live in as your primary residence, as well as certain other properties.
You can select from a fixed-rate mortgage with a term of 15 to 30 years, or a 30-year adjustable rate mortgage (ARM) that has annual rate adjustments after the 3rd, 5th, 7th, or 10th year. Whichever term you choose, you have just one set of closing costs and can lock in the interest rates on the renovation and the permanent mortgage at the same time.
The borrowed money can cover any renovations you want or need, as long as they are permanently part of the property and add value to it. Other costs related to a renovation are also covered. For example, you can even finance the rent on another home or apartment to live in while the renovations take place!
For home purchases, the loan amount can be based on the costs of the renovation project or on the “as-completed” value of the home after the renovations are finished. That means you can borrow more than the home’s current value, knowing its value will increase after the improvements are finished.