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Is a Renovation Loan Right for You?

Let’s face it, with today’s home prices we’re all used to having to compromise on a few wish list items in our house hunts. Granite countertops? Maybe next time. Spacious backyard? Someday. But what if we told you to say goodbye to those compromises? That’s right, you can still get your dream home, within reason, without breaking the bank! Enter Northpoint’s Renovation loan options.



Imagine finding a house in the perfect location, but it needs a bit of work to become your ideal home. With a Renovation loan, you don't have to pass it up. Whether it's modernizing the kitchen, adding an extra bathroom, or creating the open floor plan you’ve always wanted, these loans make it possible to customize your home to fit your exact needs.


Northpoint’s Renovation loan options offer a unique solution for homebuyers who are ready to turn a fixer-upper into a fabulous home. Instead of settling for a house that’s almost perfect, you can tailor it to your vision. And the best part? You can roll the cost of renovations into your mortgage, simplifying the financing process, keeping your budget in check, and have a seasoned Loan Officer by your side to navigate the crazy world of contractors.

 


A Mortgage and Renovation loan all-in-one


Renovation loans are great for those looking to purchase a property that needs some repairs or that may not quite meet your needs but, with some work, would be a dream home! Renovation loans are also excellent for homeowners who want to make improvements or repairs to their existing homes.


Renovation loans are an all-in-one way to purchase or refinance a property and finance repairs and improvements. The unique advantage of a renovation loan is that it lets you borrow based on the as-completed value of the property. This means you can often secure more funds than with a traditional cash-out refinance or Home Equity Line of Credit, which only considers the property's current value.


In today's market, where mortgage rates are higher than in recent years but still typically lower than those of personal loans, renovation loans present a cost-effective way to fund your home improvement projects. By incorporating renovation costs into your mortgage, you benefit from potentially lower interest rates and a simplified repayment process.


Northpoint Mortgage has an experienced team dedicated to renovation loans who will help guide borrowers through the renovation process. Including educating Realtors and Contractors through the process, because you shouldn’t do this alone.

 


Advantages of a Renovation Loan


Renovation Loans offer a number of advantages over some traditional methods of renovation financing:


  • Avoid depleting your savings or maxing out your credit cards to pay for needed repairs and wanted upgrades

  • By combining your mortgage and your remodeling loans, you simplify your monthly bill paying and may lower your interest rate

  • Build equity faster by increasing the value of your home

  • Add to your home’s value when you decide to sell

  • Claim a larger tax deduction by combining renovation and mortgage interest

  • Have help negotiating the complex world of renovations, dealing with contractors, town building department for permits, with the Northpoint’s Renovation Team alongside you

 


How do Reno loans work?


When renovating your home’s structure, electrical, or plumbing systems, you must hire licensed contractors. This ensures the work meets high safety and quality standards. Additionally, only one general contractor can oversee the project to maintain clear accountability and coordination.


Your mortgage lender enforces these rules to protect its investment until the loan is repaid. Using only licensed contractors and a single general contractor prevents poor-quality work that could lower your home's value. You cannot save money by hiring an unqualified handyman or doing the work yourself, as this could compromise your home’s safety.


You and your contractors must follow a set payment schedule to ensure proper financial management and avoid project delays. You might also need to work with a consultant to manage the renovation, ensuring it stays on track, meets regulations, and satisfies the lender’s requirements.


While these rules may increase the complexity and cost of renovations, they are in place to protect your home’s value and ensure the improvements are done professionally.

 


What kind of updates can be made with a Renovation Loan?


This is the fun part. Below is a list of some of the most popular updates you can do with a renovation loan. Reach out to your local Northpoint Lender to ask about any specific updates you may have in mind.

  • Repair/replace:

    • Roofs, gutters, and downspouts

    • Existing HVAC systems

    • Plumbing and electrical systems

    • Flooring

    • Window and door replacements and exterior wall re-siding

    • Septic system and/or well repair or replacement

  • Repair, replace, or add exterior decks, patios, porches

  • Remodeling, such as kitchens, bathrooms, basement finishing involving structural and non-structural repairs.

  • ADU (accessory dwelling unit, In-law apartment) remodeling or building to allow family members to move in, or rent out

  • Painting, interior and exterior

  • Weatherization, including storm windows and doors, insulation, weather stripping, etc.

  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens

  • Accessibility improvements for persons with disabilities - stay home, stay independent, Northpoint will tailor solutions for aging in place.

  • Lead-based paint stabilization or abatement of lead-based paint hazards

  • Basement waterproofing

 


Choosing the right renovation loan option for you


At Northpoint, we offer a variety of Renovation Loans to fit your needs.


  • Conventional Renovation Loans

  • FHA 203K Loans

  • USDA Renovation Loans

  • VA Renovation Loans

  • Multifamily Renovation Loans

  • Single Family Home Investment Renovation Loans

  • 2nd Home Single Family Renovation Loans


Renovation loans can be completed with conventional loan products as well as FHA and USDA/RD. Each type of loan has its own unique characteristics. We work with a number of investors, including some State Housing Agencies to find the right product for you. Learn more about our Reno loan options by visiting https://www.trynorthpoint.com/renovation-loan or by contacting your local Northpoint Loan Officer. 

 


Refinancing to Make Improvements


Reno loans aren’t just for people purchasing a new home. If you own a home and want to make some much needed upgrade, you can refinance into a renovation loan! Renovation loans allow you to borrow based on the as-completed value of the property, meaning you can often borrow more money than with a traditional cash-out refinance or Home Equity Line of Credit which is based on the current value.

 


Renovation Loans are a great way to turn any house into your dream home. These loans let you finance both the purchase and the improvements, so you don’t have to settle for less. Whether you're buying a fixer-upper or upgrading your current home, Northpoint’s Renovation Loans offer a smart, affordable solution.


By rolling renovation costs into your mortgage, you simplify your finances and ensure the work is done by pros. From new appliances to major repairs and accessibility upgrades, these loans cover a wide range of projects.


Northpoint Mortgage offers various renovation loan options, like Conventional, FHA 203K, USDA, and VA loans, to fit your needs. Our team is here to help you through every step, making the renovation process easy. Check out our website or contact your local Northpoint Loan Officer to learn more and start turning your house into the perfect home.

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