Renovating a home means getting yourself good wealth. Perhaps, it’s challenging to raise finance; however, Fannie Mae Homestyle is one of the popular options to receive a loan for the renovation. The loan allows a borrower to refinance a home and proceed with the renovation with the same single mortgage. Thus, saving the borrowers a whole pile of money.
Let me walk you through some real facts about the loan!
What is the Fannie Mae HomeStyle Loan?
On average, homes in the United States need renovation after completing 37 years. The time varies from country to country as in some countries home renovation is done after 50 or 60 years. In the end, homeowners, at a certain point in time, renovate the home.
As mentioned above, home renovations are pricey or expensive. Plus, if someone plans to think about a separate loan, then it will charge you more and put you in a great hassle. Time to enter the HomeStyle Renovation loan. Here, one can buy a fixer-upper home and pay for the renovation costs that turn into a single mortgage loan.
Many people favor HomeStyle loans as they find them cheaper than other loans. People are looking for the mortgage rates in Chicago. If one is qualified, the mortgage rates can go down to 3%. However, the rates vary depending on the home property, and then a loan is refinanced at a particular rate ( which is generally low).
What are the Benefits?
- Down payments are highly low when compared to other refinancing options. It can be as low as 3%. But the rate can be high for manufactured homes, investment properties, or multifamily units.
- An appraiser is assessed based on the future value after the renovation is done.
- Some renovation work is done by the borrowers themselves. But it doesn’t mean to involve yourself in the critical tasks as such tasks are only done by licensed professionals. The work in terms of quality is inspected, and the contribution of the homeowner’s work reduces the mortgage rate to some extent.
- Eligible borrowers can add mortgage payments to the loan balance until they move in. But the condition applies for a certain period.
How does the Fannie Mae HomeStyle Renovation Loan Works?
Every loan goes through some steps before getting approval, similar to the HomeStyle Renovation Loan.
- Look for a lender and know your eligibility.
- One can work with a reputed yet licensed contractor to create detailed schedules & plans required in the process. Preferred mortgage solutions can help the borrowers to understand the loan working and free them of burden.
- Submit the plans to the lender.
- Then the appraiser assesses the home & plans thoroughly to do a complete valuation.
- Once the appraisal is completed, the lender offers the borrower a maximum loan amount to be purchased.
- Once all the documentation and other critical tasks are completed, then the lender releases the money.
- Now the refinancing is completed, and the borrower needs to be responsible for the monthly payments as per the loan terms & conditions.
Of course, it sounds a lot, But the loan process takes time, so professional involvement can be helpful if you are very new to the process. This saves tons of time & effort.