If you’re a current homeowner, looking to renovate, upgrade, or repair your current home, a Fannie Mae HomeStyle Renovation Loan might be your solution.
With a Fannie Mae HomeStyle Renovation loan, you would refinance your current loan into a new loan, and finance the cost of the renovation into the loan. Therefore, you would have a new 30 year fixed loan.
This may be a more cost effective way than:
A Home Equity Line of Credit: A Home Equity Line of Credit (or HELOC) is a loan that goes in 2nd position, behind your current 1st loan. Though the product can differ from lender-to-lender, often times these HELOC’s are higher, variable interest rates. Home Equity Lines of Credit also require equity in the home, and some will not allow for higher than a 80% Loan-to-Value.
High Interest Credit Cards: Many credit cards have interest rates iin the 15% to 20% range. A Fannie Mae HomeStyle Renovation Loan can allow you to avoid opening high interest credit cards.
Depleting your Cash Savings: For many homeowners, renovating a home would mean completing depleting themselves of cash reserves, dipping into savings, or borrowing from retirement. A Fannie Mae HomeStyle Renovation Loan allows you to avoid this.
Borrowing with a personal loan or from a family member: Whether it’s a high interest private loan, or just the thought of being in debt to family, a Fannie Mae HomeStyle Renovation Loan may be a better solution
A Fannie Mae HomeStyle Renovation Loan gives you the opportunity to remodel your house into the home you’ve always wanted, but never had the financial resources to do so. Not only will you enjoy living in an updated home, but you are also adding value in the form of equity into your biggest asset.