Nix it or Fix it: Kitchen Renovations
Everyone’s daydreamed about remodeling something in their home. That wall that shouldn’t be there. The carpet that just has to go. The outdated cabinets. Even if you’re renting a house, you’ve probably thought about what you’d remodel if you owned it.
Topping the majority of Americans’ list for most desired room in the house to renovate is - you guessed it - the kitchen. Not enough storage. Appliances from the 80’s. The fluorescent light with the plexiglass cover that reminds you of seventh grade homeroom. Visions of sledgehammers and one of HGTV’s superstars coming to the rescue are probably not far-fetched.
When it comes to renovation, it’s common knowledge that the costs can be hefty and the unknown problems inside the walls and beneath the floors can be scary.
What many people are not aware of is the array of options available for financing and wind up brushing off their ideal kitchen as merely wishful thinking.
Going from drab to fab requires funding. Most Americans don’t realize there are financing options available outside of the traditional scope of lending products. Before you hang up your oven mitts, let’s review a few.
You don’t have to own the home to remodel it.
Let’s qualify that statement real quick - you don’t have to own it YET. Imagine you’re house hunting and you’ve found the perfect home in the perfect neighborhood with the perfect yard - everything is perfect… except the kitchen.
Did you know that there are unique mortgage home loan products that will allow you to roll the cost of the renovation you want to do into the purchase mortgage? Yep, that’s right. You could possibly get that perfect home with the not so perfect kitchen and fund the remodel through the purchase transaction.
A HomeStyle Renovation mortgage, for example, is a government-backed loan that allows qualified borrowers to add extra money for remodeling or improvements to an initial home purchase mortgage or a mortgage refinancing.
The loans are meant to offer a “convenient and economical” way for homeowners, homebuyers and investors to finance minor or moderate home improvements through a single-close first mortgage or refinance—rather than having to apply for a second mortgage, home equity line of credit or other costlier finance options, according to Fannie Mae.
There are a few caveats to these types of creative financing products. Like any other mortgage loan, there are qualifying factors and you would need to work with a licensed loan officer to get approved. If approved, the work must be done by a licensed contractor and the work typically needs to be done within 6 months of purchase. Some products may require approval of the contractor or that you use one from a designated list. Your loan officer will be able to best advise you on your options.
There are mortgages to finance renovations for your current home.
If you currently own your home and want to gut that outdated kitchen, there are a multitude of mortgage loan products that offer financing to homeowners wishing to make some improvements.
Most products that offer financing to existing homeowners for improvements are reliant on a positive equity based on a current appraisal of the home’s value.
Some mortgage products are purpose-specific for renovation. Other options could be a cash-out refinance or a home equity line of credit (HELOC).
A licensed loan officer is, again, your best ally in making a smart financial decision for your specific needs and situation.
If you’re ready to update that kitchen or any other other room in your home, Geneva Financial offers a wide portfolio of mortgage home loan products for a variety of needs and financial situations. If you know a Geneva loan officer, contact them today for a complimentary consultation or find a loan officer near you.
Get more information on Renovation Financing
*This article is intended for educational purposes.
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This is not a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet LTV requirements for refinances, and final credit approval. Not all applicants will qualify. Approvals are subject to underwriting guidelines, interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions. Geneva Financial LLC is not acting on behalf of or at the direction of HUD/FHA or the Federal Government. Geneva Financial LLC is approved to participate in FHA programs but the products and services performed by Geneva Financial LLC are not coming directly from HUD or FHA. Geneva Financial LLC NMLS #42056 is an Equal Opportunity Lender and Equal Housing Lender. 3155 S. Price Rd Chandler, AZ 85248. 1-888-889-0009. AZ BK #0910215