What You Need To Know About Construction & Renovation Loans

What You Need To Know About Construction & Renovation Loans

When most people consider mortgage loans, they generally think about the typical, long-term financial commitment to buy a home.

But did you know there’re even mortgages available especially for constructing or renovating a home? Let’s discuss how you can benefit from a construction or renovation loan.

Construction loans: Construction loans are known as short-term loans employed to finance the building of a new home. As soon as the home is constructed, the borrower need to refinance into a permanent house loan. Construction loans generally comes with a term of one year. They’re employed to cover the expenses involved with constructing a custom home, such as building land, labour, building materials, permits, and even sometimes permanent fixtures such as appliances and landscaping.

Renovation loans: Renovation loans are employed to finance house renovations, repairs, and revamps. This type of loan is an excellent alternative if you wish to restore your present home or wish to buy a house that requires substantial remodels.

There’re many options for renovations loans; two of the most common are FHA 203(k) and FNMA Homestyle loans. FHA 203(k) loans are given by the Federal Housing Administration. They give funding for repairs in one mortgage on a main dwelling and have a minimum down payment of 3.5 percent.

There’re 2 kinds of 203(k) loans: Standard FHA 203(K) loans which let borrowers finance rehabilitation costs starting at $5,000 and have no maximum. Streamline FHA 203(k) loans offer renovation & repair funding for up to $35,000. Then again, there’re FNMA Homestyle loans which are given by Fannie Mae and let you buy and renovate a second home, primary residence, or investment property with a minimum down payment of three percent in one mortgage up to the lending limit.

Are you planning to construct your dream home or renovate your present dwelling?

Talk to a Low Rate Mortgage Lender in Oakland C A to know which loan makes the most sense for you. The interdependent mortgage broker here at All California Lending can help you connect with some of the most highly reliable low rate mortgage lenders in Oakland CA .

Whether you are purchasing your first home, refinancing your existing home, buying an investment property or are in need of any other real estate financing, All California Lending can help! Call us on (877) 462-3422!