In Part 1 and Part 2 of the Hypothetical Remodel Series we laid the ground work at what to expect. We are taking a home and showing how, in Houston, you can buy an existing home and Renovate it to be Green to stay within your desired price range. Sometimes buying a New Construction home will either not get you the location, style or price range that you want.
I left off talking about how to Finance the home that you are buying and finally found a Phenomenal Mortgage Company that offers a wide variety of Renovation Loans. Typically in the past, these kind of loans appealed to Investors but now is making its way down to everyone. This is because you buy the home and finance your Home Improvements all in one loan.
Back to the example of the Hypothetical Remodel. We talked about how the proposed home was listed at $326,600 and it would likely take about $75,000 to get the home to where you want it. The loans that I mention above are Perfect! Many people have heard of the FHA 203K loans, but this example is outside of the FHA limits in Houston. It will take a conventional loan.
Before we lay out the examples and how the Renovations will look I wanted to lay out the Highlights of this loan first. Here is what to expect with Prime Lending’s Purchase Plus Program aka. conventional renovation loan:
- As little as 5% down at closing and Seller’s are allowed to pay some towards closing costs
- If you are going GREEN there is no $100,000 cap on the Renovations
- The Renovations on this loan are open to everything BUT Roof, Foundation and Septic Systems
- The home is appraised at AFTER Renovation Value
- The contractor, bids, design, etc. are already figured out PRIOR to closing
- The money for Renovation is then added to your mortgage (Ex. $325K + $75K = $400K)
- Typically the lender requests that the work be completed within 60 Days-Preferably less
- You can even add Square Footage to the rooms such as additional Bedrooms
- The credit requirement is typically about 620 and higher
So pretty much, everything goes. Literally you could add windows, new A/C, tankless hot water heater, Solar Panels Galore, Completely Renovate the kitchen-master bathroom-powder bathrooms- whatever your heart desires and still get your 5% down in most cases. These can also be mixed up to 80-15-5, etc.
For the duration of the Hypothetical Remodel Series we will get in to how much the Renovation will cost, what is being changed (including the 50% reduction in energy usage and ReGreen Master Bathroom Remodel) and finally at the end how much (approximately) the Mortgage Payment would be by using this kind of loan.
For now, if you would like more information on this loan I recommend contacting Christine Wilson with Prime Lending.
Christine Wilson/Kelly Duff
Quick Disclaimer: Although the mortgage program mentioned in the article below will be available to many people and is very open to different items- Like all mortgage programs the TRUE numbers and availability will depend on the Borrowers specific situation regarding credit, income and all of the other items that come in to play when getting a mortgage. Please note that if you are wanting information specific to your needs that I recommend you contacting the mortgage contact listed to find out today's rates vs. your situation. Also one small note, the Purchase Plus (Renovation) Program discussed specifically in the article is currently only available in the State of Texas with Prime Lending.