Buying a new house or even refurbishing it requires a lot of capital. Think about the necessary amount of money when you buy a house and renovate it afterward. Even the private lenders or mortgage companies do not lend more than the price of the property. Are you wondering how individuals arrange the capital for extra money spent on refurbishing a property to make it livable? Thanks to the home loans like Fannie Mae’s homestyle loan for renovation, which has made it easier to buy a fixer-upper. This type of home loan allows you to buy a property as well as finance its repairs and renovation in a single loan. Isn’t that highly convenient that you do not have to separately go through the loan application process to apply for the loan twice??
Unlike the traditional mortgages, which do not lend you more than the current worth of the property, Fannie Mae’s homestyle renovation loan is based on the value of the property after the refurbishment.
What exactly is Fannie Mae’s homestyle renovation loan?
Fannie Mae’s homestyle renovation mortgage is a two-in-one mortgage loan. It allows the borrowers to borrow both the purchase price of the potential home and any renovation costs in one mortgage loan amount. Applying for this type of loan is essentially beneficial while buying a home that needs a little or a lot of remodeling. Whether you are investing in the property for living or investment purposes, there is always a requirement for renovation so that it suits one’s needs.
How is Fannie Mae’s homestyle renovation loan flexible?
The homestyle renovation loan is super flexible, especially while carrying out repairs and remodeling. You can do the following listed renovation, which can be included in the renovation loan financing:
1. Redoing the interiors from scratch ranging from kitchen to living area to bathing rooms and much more.
2. Building a dwelling unit or smaller separate residence consisting of a room or two with attached bathing rooms. These smaller units are generally constructed if the borrower wants to rent them out for additional income or make space for extended family members.
3. Adding a touch of luxury to the space like installing a swimming pool, fireplace, or outdoor kitchen in the backyard. The borrower can also choose to add permanent landscaping features, like trees, sheds, etc.
You can customize the property according to the needs and desires of your family members. As long as the renovations are permanently affixed to the property, it will be coined under Fannie Mae’s homestyle renovation loan. Although the mortgage allows you to go out of the box while remodeling your house, you do not necessarily have to go big. If the property only requires new floors and new paint and nothing else, you can just get financed for that. Ultimately, the more loan amount you apply for, the heavier monthly installment will be made along with the interest rates.
Refurbish your dream house as you desire by applying for Fannie Mae’s homestyle renovation loan!