Unlike a home improvement loan, renovation loans give homeowners credit for a home's estimated future value called "after renovation value." Investees get greater borrowing power to finance their entire restoration project(s) by getting this credit for the increase in home value from the proposed renovation upfront. Lenders hire appraisers to review the renovation plans to determine how much value the changes will add to the current home value.
In addition to enhanced available funding, renovation loans have lower interest rates and better terms than other types. Primary residences, including manufactured homes, second (vacation) homes, investment properties, and even ground-up new construction, may be eligible for a renovation loan. Unsure if this loan type is right for you? Call EB Mortgage to learn more.
Different Types of Renovation Loans
- Home Equity Loan or Home Equity Line of Credit (HELOC)
- Cash-Out Refinance Loans
- Single Close Construction to Permanent (CPT) Loans
- Fannie Mae Homestyle Loans
- FHA 203ks
- Personal Loans
Other loans, such as cash-out refinancing and home equity loans, can pay for renovations; however, they rely on equity that the homeowners have built up over time, so new homeowners may not qualify. Renovation loans allow homeowners to tap into their future equity, thus increasing how much they can borrow. A renovation loan outweighs any of the alternatives listed above to obtain the financing required to renovate your home improvements.
The loan process can be tricky; we make it easy. EB Mortgage has lending solutions for all types of unique needs. Call (616) 228-8797 to find out how we can help you!
Our "3C" Process:
Complete our pre-approval request
Consider options based on your requirements
Choose the offer that suits your needs best