HomeStyle Renovation Mortgage
Have you looked at a home in a neighborhood you love, that has the perfect layout, or the spacious yard you've been wanting? But it needs updates or major repairs, and you're not sure you can afford to make those changes after you buy.
You might even be living in a home you love that needs updating or has started to feel too small for your growing family. But the high interest rate for a home equity line of credit or second mortgage puts renovation costs out of reach.
Well, you're not alone. A number of homebuyers and owners can see a home's potential but aren't sure how to pay for the renovations. HomeStyle® Renovation mortgage could be the solution.
With a HomeStyle Renovation loan, eligible homebuyers and owners can renovate a home to fit their needs and personal style with just one loan that covers the mortgage and improvements.
How Does It Work?
When you buy or refinance a home, HomeStyle Renovation allows you to finance improvements for up to 50% of the property's as-completed value (the appraised value of the home once the upgrades are completed).
This type of financing can be a more cost-effective way to renovate your home, since it combines the cost of the home and renovations into one mortgage. It also addresses some common financial challenges with purchasing and/or renovating a home by offering:
- Low down payment options – You can put down as little as 5%.
- Savings – You may save money by avoiding closing costs on a second mortgage or with a lower interest rate than those on a home equity line of credit.
- Flexible source of funds – Your down payment could be made with eligible gifts or money from down payment assistance programs.
Also, the renovations you'll make have the potential to create equity in your home right away.
Talk with a lender for details and to see if you qualify for a HomeStyle Renovation mortgage. If your lender doesn't offer HomeStyle Renovation, ask about other affordable financing options. Always compare and shop around for the mortgage that works best for your financial situation.