Categories: Remodeling

Different Ways to Finance Your Home Renovation

There are several ways that you can finance a home remodeling project. Whether it’s kitchen remodeling or a complete home renovation, expenses can be significant. But by borrowing money, you can ensure that the costs will be covered and your dream home can be achieved. 

Home Renovation Loan

A home renovation loan is a type of home equity loan that uses the future value of your home after the remodel in order to calculate the Combined-Loan-to-Value (CLTV) ratio. This has grown to be a popular option for many homeowners because it does not require them to refinance their first mortgage.

Fannie Mae HomeStyle Loan

This is another type of loan. It converts to a permanent mortgage, typically with a traditional 30-year fixed term. A Fannie Mae HomeStyle loan can replace your current mortgage, so in a way, it can be considered as refinancing. This loan allows you to borrow up to 95% of the future value of your home, but you will have to pay Private Mortgage Insurance (PMI) if you go above 80%.

Single Close Construction to Permanent Loan (CTP)

This is mainly a construction loan that converts to a permanent mortgage with a traditional 30-year fixed term. Much like the Fannie Mae HomeStyle Loan, it also replaces your current first mortgage so it works like refinancing. One of the advantages of CTP is the low monthly payments, which you can spread over 30 years.

Whether you’re looking for new addition contractors or remodelers, Design Build Remodeling Group of Maryland is ready to provide top-notch services. Our expertise covers the design and construction of large-scale residential remodeling projects. Call us at (443) 300-2268, or fill out our contact form to request a consultation. We serve customers in Washington, DC.

Eric Swanson

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