Expert Tip Monday: What is HomeStyle Renovation Financing??
We can discuss trends, colors and products all day but there's one home improvement question that applies to each and every project: How are you going to pay for it?
Today we turn to Todd Sheppard of Lion Bank to talk about an option you may not be aware of, the HomeStyle Renovation Loan. Here's Todd to explain how this financing works and how it could help you create the home of your dreams:
Have you been putting off a much-needed home repair or improvement because you feel you can’t get the financing? Do you need more space or a 21st century kitchen but don’t have the equity in your home to pay for it? Do you need to fix up the place to increase its resale value but don’t want pay out of pocket for the updates? If you answered yes to any of these questions then a HomStyle Renovation Loan may be your solution.
The HomeStyle is a conventional renovation loan that will allow you to borrow up to 95% of your home’s after-improved value up to a loan amount of $417,000 in the Atlanta, GA market. That means that even if you currently have zero equity in your home, you may be able to finance 100% of your repairs and/or improvements.
Let’s look at an example, let’s say your home in Alpharetta is currently worth $300,000 and your mortgage balance is $300,000. You would like to update your kitchen and add a half bath which will cost you $50,000. With the Homestyle renovation loan, the appraiser would take your improvements into consideration in determining your after improved value of say $370,000. As I mentioned above, you can borrow up to 95% of the after improved value which in this case would give you a new loan amount of $350,000 so you could indeed finance all of the work to be done.
Let’s take a quick look at the advantages of HomeStyle Renovation financing:
· Fixed rates available versus floating with prime on equity lines
· Renovation budgets can be well over $100,000
· Funds dispersed to contractor only as work is completed which keeps you in control
· Virtually no limit to the repairs or improvements that you can make
· Credit scores allowed as low as 640 versus 700+ for most equity lines
· You can borrow up 95% of the improved value of your home so you don’t need a lot of equity
I hope that you find this information helpful and it inspires you to revisit your dreams of home improvement. If you would like to learn more about this fantastic renovation loan please don’t hesitate to contact me!