All About... Renovation Lending
Renovation Loans- Buy More, Sell More
Real Estate Agents hear it frequently - “I like older homes, but I want modern features.” “The kitchen and bathroom are really outdated.” “This house would be great if it had an in-ground pool.” The list can go on and on. Many buyers have a list of “must-haves” that greatly outweigh the list of compromises. Looking for the home that has it all can often be a challenge and a time consuming venture for both the buyers and their agents.
Obviously, buying a house is a big decision and being one of the largest investments of a lifetime, it is certainly important to not just accept any house – it needs to be a house the buyer can see themselves in and make it feel like home.
Renovation mortgages can be the answer to the buyer that says, “I like this house, BUT…” With two key program options, the “but” can easily become an “and”… “I like this house AND I can upgrade the kitchen, upgrade the bathroom, install central air and make it my own.”
The most familiar renovation mortgage is the FHA 203(k) loan. This loan offers a great deal of flexibility for improvements or repairs including painting, flooring, updated appliances, modernizing HVAC systems, addition of decks or patios, basement finishing and more. As with any program, there are certain guidelines and restrictions, but ultimately plenty of options for a buyer to personalize the home in many ways.
Another favorable option for a renovation mortgage is the Fannie Mae HomeStyle Loan. This loan offers even more flexibility and can be used for both primary and secondary residence purchases. Improvements and repairs include many of the same as the FHA 203(k) but in addition will allow the construction and installation of an in-ground swimming pool. This program also has guidelines and restrictions but enough flexibility for buyers to gain additional benefits of a renovation mortgage.
Not only can renovation loans be a favorable choice for buyers, but they can also offer great advantages to sellers. In some cases, a seller may be hesitant to list their home if they need to do upgrades or improvements – thinking the home needs to be perfect before it may appeal to a buyer. In addition, the current homeowner may not have the financial resources to do the improvements. Also, if they did improvements, it would be of their taste and may not appeal to a potential buyer. With a strategic marketing plan, a home that may need repairs or modernization can be listed as an opportunity for a potential buyer to be creative or improve the home to their liking. This may provide an opportunity for a listing agent to take different prospective or a fresh angle to market a home that otherwise may lack certain appeal.
With the Summer housing market just around the corner – new ideas and opportunities can turn a house into your dream home. Renovation mortgages can be a key contributor to differentiation and a new life in to what may be considered some tired inventory. Many lenders offer renovation programs and the best way to get started is for a buyer to meet with a licensed mortgage loan originator to learn about all options available to them.
Armando Tautiva, Mortgage Loan Originator - NMLS #546641
HomeBridge Financial Services, Inc. | 500 Winderley Pl, Ste 112 | Maitland, FL 32751
Cell: 407-733-0752 | email@example.com| www.HomeBridge.com/ArmandoTautiva
Florida Mortgage Lender Servicer License MLD1222