You will want to begin your project with plans and a bid to fit your budget. If you are purchasing a property with the intent to renovate, there are several mortgage options available that will allow you to borrow the acquisition cost of the home plus the cost of the renovation. Not all lenders, however, offer these programs. The following list of local lenders that are experienced in originating rehab loans is a good place to start. Your lender will consider your credit rating, income, and the loan to value ratio of your finished project to help you determine how much you can borrow. An appraiser will review the plans and bids to predict your home’s prospective value after the renovations are completed. John will prepare bids to help you decide if the property you are considering purchasing requires renovations that fit comfortably in your budget.
For owner-occupants, the FHA 203k and the FNMA HomeStyle Renovation mortgages are two loan programs that allow homeowners to purchase a “fixer-upper” and borrow the funds to make their desired improvements. Both have low down payments – 3.5% and 5% respectively. After purchase, your renovation funds are held by your lender to be paid to your contractor in “draws” approved by you and your lender’s consultant as work on your project is completed. Golden Age Restoration is certified to work on projects funded by either of these types of mortgages.
If you own your home or have a low enough mortgage balance, you may wish to put your equity to work by re-financing your mortgage or establishing a home equity line of credit.