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If you are planning to update a home after you buy, you may be considering a renovation loan. Many homebuyers are struggling to find move-in-ready homes in the current housing market. Purchasing a fixer-upper may be a great solution, as long as you have the funds to make the necessary renovations.
A renovation loan provides you with the funding to purchase a home that requires work and includes a reserve of funds placed in escrow to pay for updates and improvements. The two types of renovation loans include the 203-k rehabilitation loan from the Federal Housing Administration (FHA) and Fannie Mae’s HomeStyle Renovation Mortgage. Keep reading to learn three reasons you should consider one of these loans to purchase a home that needs work:
#1: A Renovation Loan Is Ideal for First-Time Homebuyers with a Limited Budget
Rather than having to take out two loans—one to buy and one to renovate—a renovation loan includes all-in-one. This also means you can wrap the costs of a home loan and home improvement into one easy mortgage payment, minimizing closing costs.
#2: Qualifying for a Renovation Loan is Simple
The renovation loan application process is easy and only requires 5 steps. No collateral is necessary. A Renovation Mortgage Consultant can walk you through the process.
#3: Freedom to Customize
When you purchase a fixer-upper, you’ll have very few renovation limitations through the renovation loan. You have the freedom to make any upgrades and changes that you see fit—from adding new rooms to updating the landscaping.
Let Midland Mortgage Connect You with a Renovation Loan
If you want to learn more about renovation loans or are ready to find out if you qualify, reach out to a Renovation Mortgage Consultant with Midland Mortgage. Contact Midland Mortgage Corporation today to get started.