The HomeStyle Renovation Loan

A “Fixer Upper” Loan

Buying a home that needs some love?

Whether it’s updating an outdated kitchen, fixing structural issues, or creating the home of your dreams, the HomeStyle Renovation Loan could be your perfect solution.

This guide will walk you through the benefits, requirements, and considerations to help you decide if this all-in-one financing option is right for you.

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What is a
HomeStyle Renovation Loan?

The HomeStyle Renovation Loan is a type of mortgage that allows you to purchase or refinance a home and finance renovations with a single loan. The HomeStyle Renovation Loan simplifies the process of buying and fixing up a home, combining your home purchase and renovation costs into one manageable monthly payment.

Benefits of a HomeStyle Renovation Loan

  • Convenience: Purchase and renovate with one loan, eliminating the need for separate financing.

  • Low Interest Rates: Enjoy interest rates on both the purchase and renovation costs which are typically lower than a home improvement loan.

  • Wide Range of Projects: Finance nearly any renovation, from cosmetic updates to major structural changes.

  • Increased Value: Renovating a home can increase its market value, allowing you to build equity faster.

  • One Payment: Simplify your finances with a single monthly payment covering both the home and improvements.

Turn Any Home Into Your Dream Home with a HomeStyle Renovation Loan!

Enjoy lower interest rates compared to traditional home improvement loans while financing anything from minor upgrades to major structural changes.

How Does it Work?

The HomeStyle Renovation Loan is a type of mortgage that allows you to purchase or refinance a home and finance renovations with a single loan. The HomeStyle Renovation Loan simplifies the process of buying and fixing up a home, combining your home purchase and renovation costs into one manageable monthly payment.

1

Get Pre-Approved:

Before you start home shopping it’s always a great idea to have the YourWayLoan team get you pre-approved. This makes your offer stronger.

2

Find Your Dream Fixer-Upper:

Identify a home that you want to purchase and renovate.

3

Plan Your Renovations:

Hire a licensed contractor and provide detailed plans and cost estimates for the improvements.

4

Final Appraisal & Approval:

The underwriter will approve the loan based on the home’s after-renovation value (what it’s worth after the updates are complete).

5

Complete the Purchase:

Close on the home, with renovation funds placed in an escrow account.

6

Start the Work:

Begin renovations within 30 days of closing and complete them within 12 months.

7

Enjoy Your New Space:

Once the work is done, you’ll have a beautifully renovated home!

Requirements for a HomeStyle Renovation Loan

  • Credit Score: Typically, a minimum score of 620 is required.

  • Down Payment:

    • For primary residences: As low as 3% (if you meet certain qualifications).
    • For second homes or investment properties: Higher down payments may be required.

  • Licensed Contractor: Renovations must be completed by a licensed contractor (DIY projects are generally not allowed).

  • Loan Limits: The total loan amount (purchase price + renovation costs) must stay within conforming loan limits set by the HomeStyle Renovation Loan.

  • After-Renovation Value: The loan is based on the home’s estimated value after the renovations are complete.

Eligible Renovation Projects

You can use this loan for almost any renovation, including:

  • Upgrading kitchens or bathrooms

  • Adding rooms or extensions

  • Energy-efficient improvements

  • Cosmetic updating and remodeling

  • Accessibility updates

  • Fixing structural issues or roof repairs

  • Landscaping and outdoor improvements

Pros and Cons

PROS:

  • All-in-One Financing:
    Streamlines the process and avoids the hassle of juggling multiple loans.

  • Increased Equity:
    Renovations can increase the home’s value.

  • Flexible Use:
    Covers a wide range of improvements, from minor updates to major overhauls.

  • Competitive Rates:
    Typically lower than personal loans or credit cards.

CONS:

  • All-in-One Financing:
    Streamlines the process and avoids the hassle of juggling multiple loans.

  • Higher Fees:
    May include additional costs like inspection fees, consultant fees, and contingency reserves.

  • Additional Planning:
    Requires detailed renovation plans and contractor quotes before approval.

  • Additional Planning:
    Requires detailed renovation plans and contractor quotes before approval.

Get the Financing You Need for Home Renovations—All in One Loan!

Qualify with a minimum 620 credit score, a down payment as low as 3% (for primary residences), and a licensed contractor for renovations.

Is the HomeStyle Renovation Loan Right for You?

This loan is a great option if you:

  • Want to buy a home that needs repairs or modernization.
  • Have a clear vision of your renovation plans and a trusted contractor.
  • Want a single, low-interest loan to cover both the purchase and renovation.
  • Are comfortable navigating the additional planning and documentation involved.

However, if you prefer to take on renovations gradually or handle the work yourself, this may not be the ideal fit.

Next Steps

1

Get Pre-Approved:

Connect with a YourWayLoan team experienced in HomeStyle Renovation Loans.

2

Find Your Fixer-Upper:

Work with a real estate agent to find a home with renovation potential.

3

Plan Your Projects:

Collaborate with a contractor to develop detailed plans and cost estimates.

4

Transform Your Space:

Close on the loan, complete the renovations, and enjoy your beautifully updated home!

Finance Your Fixer-Upper & Bring Your Vision to Life!

Ideal if you want to buy a home that needs updates, have a trusted contractor, and prefer a single, low-interest loan to cover both the purchase and renovations.

The HomeStyle Renovation Loan is a powerful tool to turn a house into your dream home. With the right planning and support, you can achieve your vision while keeping your finances simple. Ready to get started? Contact your YourWayLoan team today and take the first step toward your renovation dreams!