Compass Mortgage - Renovation Loans

Purchase Plus:

A Purchase Plus or renovation loan will provide you with the money you need to purchase the loan "Plus" the money you need to repair and/or upgrade your new home after the closing. It's perfect for a forclosure property or other fixer uppers.

Because renovation loans are based on the property's "after-improved" value and condition, it's as-is condition doesn't matter as much. The repairs to be completed after the closing should be at least $5,000. Remember, you maybe limited by:

what you can afford
loan limits in your area and
comparable property values in the area

A renovation loan may be appropriate if you:

have found a home you love that needs a little work
are a current homeowner with little equity who wants to remodel
are ambitious and want to put some sweat equity into a home.

Renovation loans can be used for:

simple upgrades to an occupied home
tearing down an existing structure and re-building a new one, using some portion of the existing foundation
moving a building you purchase (or own) onto land that you purchase (or own).

Types of Renovation Loans:

FHA 203(k) loans: offer flexible qualifying and low down payments. Available to borrowers of all income levels, to homeowners who plan to occupy the house, and for homes with one to four units. Investors are ineligible.
Conventional renovation loans (conforming and jumbo): offer higher loan amounts than FHA and permits vacation homes and investors. Also allow some luxury improvements (such as hot tubs and in-ground swimming pools) that FHA will not permit.

Renovation loans are ideal for people who want to purchase and renovate a property with "potential", as well as current homeowner without much equity. The more work that is needed, the more that a renovation loan makes sense. If only minor work needs to be done, you should look at other financing options.

Wondering if a renovation loan makes sense for you? I'm Charley Farley, give me a call at (603) 471-9300 or e-mail charley.farley@weloannh.com.

Compass Mortgage Inc. - 172 Route 101 - Bedford, NH 03110-5416
Office Phone: (603) 471-9300 Fax: (603) 472-8811 Toll Free Phone: (877) 211-5300

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