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How Do Renovation Loans Work?

Monday, November 9, 2020   /   by Stephanie Cornacchione

How Do Renovation Loans Work?

If you’re thinking about buying a home that needs some work and you want to use the bank’s money to pay for it, we’re going to show you how to do that today.

Believe it or not, you have a lot of different options when it comes to getting a renovation loan. FHA, VA, and conventional products all have renovation loans as an option. There are a lot of different ways to go about getting one, but they’re structured similarly.

However, the process is the same for all of them. First, you find the property you want to renovate, then you go out and determine what kind of work you want to be done on the property and how much that is going to cost. You will then submit those quotes and the purchase contract to an appraiser, who will appraise the property based on its completed condition.

“FHA, VA, and conventional lenders all offer renovation loans.”

Once that happens, the bank will fund the loan to complete the purchase and set aside those funds into a “fund control,” an account that will be used for the renovation project itself. During construction, you’ll make regular draws against that account until the property is completed.

Regardless of which type of project you’re looking to accomplish, there are a lot of tools to help you get it done. We work with lenders who specialize in these kinds of products and would love to connect you.

If you have any other questions for us, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.

Keller Williams
Jack Campbell
12750 High Bluff Drive Suite 300
San Diego, CA 92130
CA DRE# 01144967

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John Schuler
Senior Loan Officer NMLS #76904
Arbor Financial Group NMLS# 236669
Corporate Office: 1805 E. Garry Avenue
Santa Ana, CA 92705
Cell: (760) 707-9353
Email: Schulerteam@arborfg.com

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