There are a variety of renovation and construction loans available for people to take advantage of. They each have their pros and cons based on your particular circumstances, so it is important to do your research to get an idea of what each has to offer.
Construction loans are designed to help people pay for the process of building a house because lenders pay out the amount in stages of development, or renovation.
This type of loan also comes with a small down payment and is very flexible for people looking to become eligible. Those who can take advantage of this loan do not need to be a first time homeowner, and might even be able to get mortgage payments financed if the house is seen as uninhabitable by a Housing and Urban Development consultant.
Generally, these loans can be used to buy and fix up condos, properties of less than four units, and mixed-use residences, in addition to more traditional single-family houses.
Another type of loan, the VA renovation loan, gives eligible buyers the chance to buy a home and fix it up. This type of loan lets people purchase a house and get funding for repairs that could total up to $35,000. The idea behind this type of loan is to ensure a home meets minimum standards to get VA financing.
If you are interested in taking on a construction loan, be sure to do your research and get an idea for the many different options out there. While the initial application process can be rigorous, a number of loan structures can be very advantageous for your plans. Insight Team can assist you to get through the process smoothly and efficiently!
Do you know how the mortgage loan process works? We want you to be educated on the process so you fully understand step by step how we are going to get you in the home of your dreams. We have a unique tool built specifically to help you understand the mortgage loan process from start to finish!
GET STARTEDThese loans are usually for less than a year in length and will feature rates that adjust to the prime rate. As a result, rates are often higher than mortgage loans, and approval will only come after a lender gets a solid construction timetable, plans, and a sensible budget for the actual building and development.
After a construction loan is approved, a lender will place a borrower on a draw schedule that is timed with the different construction stages.
Borrowers are usually expected to make interest payments during construction, and the lender will often send a staff member out to the job site at different times to check on the progress and make sure construction is actually taking place.
Those looking for a loan need to be prepared with good credit, a solid income, and have cash on hand to make a 20% down payment. You will also have to furnish details about the home plans and give contractor information so the bank can follow up. Working with a good contractor will make the process very easy.
The FHA 203k loan is generally good for people who are trying to improve their house or purchase one that needs renovation. This gives people the ability to merge their renovation costs with their mortgage into one loan payment.
After getting your FHA loan and purchasing your home, you may think that everything is up to you to manage. But with Insight Team, you will continue to be supported and educated on how to manage your mortgage. The NEO Experience is a home ownership program that will guide you after your already have your home. We offer this so you have expert guidance at all times, always have a perfect mortgage experience and proactively maintain your home, which increases your home value over time! Contact Insight Team today to learn more about “NEO Experience”.