Whether you are thinking about renovating a small room or installing a home office in your house, it is going to require a lot of money. Saving up all that money can take a long time. However, you don’t really have to wait that much because you can take a home loan. Mark Roemer Oakland explains how you can get a home loan for renovations.
How to Get a Home Loan for Renovations
In order to get a renovation loan, there are several steps you need to follow. These steps are:
Choose the Loan Type
Actually, there are different loan options available. While not many people are aware, you have plenty of options to choose from. For instance, you have a Fannie Mae Homestyle Loan, Home Equity Loan, and even FHA 203K among other options. It is up to you to choose the loan type that works the best for you.
For starters, when it comes to the Fannie Mae Homestyle loan, it enables borrowers to either purchase a place that requires renovations or just update their existing home with the money they obtain for improvements. One of the key benefits of this loan is it is just one loan with a single monthly payment. There is no need to take a loan for repairs and another loan for a mortgage. Obtaining one loan cuts down on closing costs and time.
On the other hand, in the case of the FHA 203K loan, it is a government loan that is capable of funding renovations and the purchase of a house under a single mortgage loan. It has two different types, and you can just select the one that suits your needs.
Meanwhile, HEL is a lump-sum, fixed-rate loan with several monthly payments that tend to stay the same for the loan term. This type of renovation loan has a revolving balance and a credit line. It works the best for a homeowner who tends to have various large payments due over time.
Apply for the Loan
Once you have selected the type of loan you prefer, you need to apply for it. It is worth noting that different loans have different ways and procedures you can apply. You are likely to offer information on your income and Social Security number. Choose whether you would like to apply by phone or online and then go through the necessary approval process.
Typically, the lender you select might offer different loan options. Some lenders might even enable you to change your due date in case you experience a problem. Let’s not forget that you require a decent credit score in order to be approved for a loan. Therefore, be sure to compare different loan options in terms of the prequalification criterion. It will help you choose the loan type that is easy to be qualified for.
Overall, as explained by Mark Roemer Oakland, this is how you can get a home renovation loan. Be sure to follow the given steps when you are applying for a loan.