Consumers Digest

Can I get a home improvement loan ....?

I am buying a house and its in my name and the financing company holds the lien on the house. It needs quite alot of work and needs an add-on or two. Can I get a home improvement loan still? Thank you all for any help and/or advice!

Public Comments

1. Although Marty gave you a helpful answer let me tell you what you actually want to know... In theory, yes you can. It all depends on the neighborhood and if the home will appraise for what you want it to. The way loans like this generally work is that you will have to have a contractor set up a schedule for you of when work will be completed and how much money he will need at different milestones. You can generally get a loan based on the final anticipated value of the home, as long as it won't be "overbuilt" for the area. After construction is completed this will all spin into a single mortgage based on the new value. It's called a one time close rehab loan. If you have any further questions feel free to send me an email, I'm always willing to talk shop!!!
2. Yes, there is a special loan aproduct called a rehab constructin loan. This is a portfolio product eaning not all lenders, and almost no brokers, have it available. The home is appraised based upon the value once the repairs and improvements are completed and the cash out funds are disbursed on a schedule as the work is done. It closes up front which means it closes before the work is begun which means you can lock in today's low rates. Payments are interest only on funds as they are disbursed until the work is done and then it converts to a fixed rate loan. Since it has a free float down option you can elect to pay the interest only during the course of constuction based upon the prevailing rate and then lock prior to the fixed rate conversion if you choose. Feel free to email me with any further questions.
3. Buy a house that doesn't need to be rebuilt.
4. Yes you can, provide there is enough value in the finished property. You just basically would be taking a second, on the property. I know a mortgage company that will loan the money to purchase the home and also the money for the repairs, they primarily do this for people flipping properties. Not sure if they will do this for an owner-occupied residents. But you could contact them and see. Please feel free to contact me.
5. of course you can get it and i must say its very easy to get such a loan
6. If you need more home improvement tips check out http://best-home-improvement-projects.com