In this post, we're covering your renovation budget, and how much can be financed.
Your renovation budget is limited to 50% of the "As Completed Value" of the home. So if the "As Completed Value" is $600,000, that means renovations can be up to $300,000.
Also keep in mind that if the As Completed Value given by the appriaser is higher than the Purchase Price + Renovation Cost, you would use the lessor.
Another limiting financing factor to be aware of is the county limit. Your new loan amount cannot go above that amount. For example, in many parts of the country, that limit is $453,100. Your loan cannot exceed this value. In other parts of the country, San Diego for example, the maximum loan limit is $649,750.
Lastly, you will also need to make sure that you can qualify for the loan amount you are applying for, from a debt-to-income ratio perspective. This just means that your total debts (including the new mortgage payment) are at a manageable level compared to your income.
Any one of these 3 factors can serve as the limiting factor of your Renovation Budget.