Are you considering giving your home a facelift, or eyeing that fixer-upper with hidden potential? Conventional renovation loans could be the key to unlocking your dream home.
In this article, we'll walk you through the essential steps of conventional renovation loans to help you understand the process.
Before you dive into the exciting world of house hunting or refinancing, the first step is to get pre-qualified. This initial stage helps you understand whether you qualify for the renovation loan program and determines how much you can afford for your project. It sets the foundation for a smooth and informed process.
Find the Property:
With pre-qualification in hand, it's time to hunt for the perfect property. Whether you're considering a fixer-upper or planning to renovate your current home, choosing the right property is crucial. Your vision for improvements will likely play a significant role in this decision-making process.
Decide on Improvements:
Once you've selected a property, it's time to plan the improvements. In collaboration with a mortgage expert at Supreme Lending, discuss your proposed renovations and make decisions based on how much you can finance.
Select a Contractor:
Finding the right contractor is a critical step in the renovation journey. Choose a licensed contractor with a minimum of 4 years work experience and 1-year business ownership and obtain a detailed bid / quote from them. Who you select as your contractor is a critical part of the success of your renovation project.
Get an Appraisal:
An appraisal is ordered to determine the home's value after the planned improvements. Make sure the appraisal has a copy of the executed bid, legible, color photos and the description of the proposed improvements included in the report.
Underwriting evaluates your application based on your final credit and the home's value after renovations. The renovation schedule and documentation are all approved through underwriting.
Close on Your Home:
After receiving the green light from underwriting, it's time to close on your home. The funds allocated for renovation are placed in a separate escrow account, ready to be disbursed as the repairs progress.
Within 30 days of closing, the renovation work must commence and be completed within 6 months.
Funds for payments are disbursed through check to your contractor or sent electronically directly to the contractor. All construction advances will require your approval prior to funding. The disbursement timeline may vary, so it's essential to stay informed throughout the process.
Enjoy Your Home:
You've navigated through the intricacies of the renovation loan process, and now it's time to enjoy your freshly remodeled space, knowing that you've transformed your property into the home of your dreams.
Conventional renovation loans provide a structured pathway to turn your home improvement aspirations into reality. By following these steps, you can navigate the process with confidence and enjoy the transformation of your living space. Happy renovating!
Supreme Lending recognizes the complexities of the mortgage landscape, particularly for those embarking on their first home-buying journey. With our team of committed mortgage experts, we are here to provide unwavering support throughout every facet of your home financing experience. Whether you're a first-time homebuyer or considering renovating your existing home, we are dedicated to ensuring a seamless and stress-free process.