Fixing up a home costs money. And what if you need a renovation loan worth more than the standard conforming limit? The good news is that the Jumbo Renovation Loan may solve your problem. Mortgage broker Jeff Berman can help you understand limits and what to except, plus make sure the process goes smoothly for you if you qualify.
Why Use a Jumbo Renovation Loan?
A Jumbo Renovation Loan combines a home purchase or refinance with a renovation outside of the limits of everyday lending. This loan funds basic renovations and repairs such as kitchens, bathrooms, swimming pools, outdoor living spaces, basement/attic finishes, hardscapes (e.g., exterior walls, walkways, etc.).
The Jumbo Renovation Loan can be used for repairs required by an appraiser or asked for by the borrower. This loan cannot address structural issues. The spending must go to items attached to the home that add value to it. The maximum amount for repair or renovation cannot exceed $250,000 or 30% of the completed renovation value.
A Jumbo Renovation Loan can be used to pay for and renovate homes of greater value with a loan amount of more than $453,100 for 2018 in most areas of the US. A higher value home can have higher repair costs. It can be expensive to repair a large plumbing system as a condition of purchase, or renovate a larger kitchen. These expenses can fall upon the person looking to buy the property or upon the current owner looking to refinance. The Jumbo Renovation Loan works similarly to conventional renovation products. The lender:
- takes the money for purchase or refinance
- adds renovation funds, and
- rolls it into a single home loan.
When you apply for the Jumbo Renovation Loan, you’ll tell the lender what changes you plan to make. The lender has to approve those changes. They use a variety of methods to determine if what you plan is worth it. The lender will want to make sure there will be a return on investment. If the changes you want to make do not increase the value of the home, it is not worth it to the lender for you to make those changes.
Benefits of Jumbo Renovation Loan
- 30-year fixed rate
- One balance
- One interest rate
- One round of closing costs
Keep in mind, you may pay a slightly higher interest rate for this loan not only because it is a jumbo loan, but also because it is for more than the current value of the home. However, you may see a great return on your investment, helping you to make the changes to your home that put more money in your pocket in the long run.
The Jumbo Renovations Loan is a great way to get large renovations done. Whether you have to replace the plumbing or electrical system in your house or you want to completely remodel your kitchen, the loan works for these purposes.
Investing so much money into a house makes it extremely important for everything to be in order. This is why you need an experienced mortgage consultant. Jeff Berman has the experience to help you find out how a jumbo renovation loan may help you reach your renovation goals. Contact Jeff Berman “The Mortgage Go To Guy”, at 214-989-7700 or complete the form below.