Renovation & Construction
Let Our Loan Professionals Devise the Optimal Loan Package for You
Whether you are thinking about remodeling your current home, buying a new home with immediate renovation needs, or building a custom home from the ground up, Prestige Home Mortgage can help with a construction or renovation loan that meets your exact needs. Our experienced and resourceful lending pros understand financing from the ground up!
Questions to Ask Before Renovating
Before planning a renovation, it is best to determine your needs. For example, you may need more kitchen storage and counter space. Clear outcomes help mitigate costs and save time. Depending on your needs, you may be ready to start a renovation project in your home.
There are various ways to pay for a renovation, such as savings or home equity. You’ll need a clear plan and budget to make the best choice on how to fund your project.
You’ll need to take a few extra steps before starting building a new home. Your Loan Officer is a great resource and can help explain those steps. The financial process of building is much different than buying. It is essential to understand your budget.
Making An Offer
The first step toward a home purchase is getting pre-qualified for a loan. Your Loan Officer will review your financial information and determine how much you are qualified to borrow. As a pre-qualified buyer, your offer on a home is more likely to be accepted.
Loan Preparation Checklist
Since everyone’s situation is unique, additional documentation might be required. Your Loan Officer will let you know exactly what is needed.
First, identify a property that needs work that you want to renovate. From there, you will provide the following to your Loan Officer to prepare preliminary figures and make sure you qualify for this specific property and renovation amount. You will then receive a pre-approval letter and make the offer.
- The first step in the renovation process will be scheduling an appointment with a licensed consultant off of HUD’s consultant roster. They will help you determine the mandatory items that have to be done to get the home up to the minimum property standards for the appraisal and help you devise the scope of work for your wish-list items (the consultant is only required for the standard versions of he renovation loan programs).
- Get contractors out to the property to see the property and obtain bids from them on the list of mandatory and desired renovations.
- Select a contractor/bid and provide them to your Loan Officer and to your consultant.
- Your Processor will reach out to the contractor to obtain the necessary documentation to ensure they meet the qualifications to do the work.
- Your consultant will revise their initial report to reflect the contractor’s figures and remove any desired items you have chosen to eliminate and/or add any additional desired and eligible repair items that were not on the initial list.
- Once you’ve decided the final scope of work that you want to include in the loan, the appraisal can be ordered, and that is done on an after-improved basis, taking into account the work that will be done to the home as part of the loan.
- Once you have provided all the necessary documentation and are pre-qualified for the loan, which is a percentage of the lesser of the acquisition cost (purchase price + renovations) or the after-improved appraised value, your loan can go to closing.
In the days leading up to settlement, you will be sent final documentation about your loan, including the Closing Disclosure. Your must review, sign, and return the paperwork a minimum of three days prior to your schedule closing date.
Your Loan Officer, or their team member, will tell you the amount of money you need to close on your home.
What happens on closing day:
During Post Closing, your contractor can begin the work. you will start making payments which works the same as a standard loan unless you’ve financed payments into the loan for when the home will be uninhabitable during the renovation (please speak to your Loan Officer to determine whether this is possible for your loan).