Home improvement projects come in all varieties: from simple fixers that breathe life into a home to major remodeling that involves gutting a home and changing the floor plan. The reasons for remodeling are as different as the projects that you can undertake: add a room, update a kitchen, or improve the energy efficiency of your home by adding new doors and windows. The housing boom of the past years has extending beyond just the purchase of homes. With low interest rates people are putting money into their homes to improve their comfort, and safety as well as to protect their investment. One way to do this is a new mortgage option that allows borrowers to renovate their homes.
Renovation loans give homebuyers some options when it comes to considering homes that need work. Since many existing homes are at least 25 years old, there is demand for mortgage loans that allow homebuyers to make repairs and improvements. In the past, financing was limited, especially if you didn’t have equity in your home. Today, there are choices when refinancing a mortgage that allow owners to finance home improvement projects. The Federal Housing Administration’s 203(k) loan is one of the most popular home improvement loan programs. This loan is used to update or improve a home needing a minimum of $5,000 in essential repairs such as new wiring, plumbing, roof repairs, or structural repairs.
Other renovation mortgage programs offer higher loan limits, allowing individuals to obtain financing for improving the property. In addition to repairs, these loans can often allow financing for luxury items such as swimming pools, hot tubs, and sun rooms. These mortgages are great ways for homeowners to repair and improve their homes. Homebuyers and neighborhoods benefit from the improvements. Investing in your home contributes to your financial well being, as well as the well being of the community.