Are you interested in purchasing a home that is in need of some additional repairs or upkeep, or do you already own a home, but are looking for a way to afford updated accommodations or remodeling? If this is the case, you may want to consider a homestyle loan, which offers funding for home improvements on either a new or a refinanced home. If you are located in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and are interested in learning more about homestyle loans, contact Foundation Mortgage. Our loan specialists can work with you to determine the best financing option for your situation.
What Is a Homestyle Loan?
A homestyle loan is a government insured mortgage that is designed to offer homebuyers or current homeowners an option to make renovations or improvements on a newly purchased home or one that is already owned. Homestyle loans usually come with lower interest rates than a home equity line of credit or other more expensive financing options. The amount of the loan is based upon the amount your home will be worth after the renovations, rather than the initial value of the home, which may increase the amount of money you are able to borrow. A homestyle loan allows you to borrow funds for both the purchase or refinancing cost of the home, plus the cost of renovations. The money from a homestyle loan can be used for a variety of renovations, including new roofing, flooring, painting, and landscaping, energy efficiency improvements, and bathroom, bedroom, and kitchen repairs.
What Are the Benefits of a Homestyle Loan?
Financing a home with a homestyle loan can offer several benefits. First of all, most homestyle loans come with low down payments and lower interest rates, and the renovations you make on your property will increase the equity in your home. Another major benefit is that borrowers who qualify for a homestyle loan are not required to pay for closing costs or other additional fees typically associated with other financing options like taking out a second mortgage. Homestyle loans can also be used for vacation homes and multi-unit properties.
How to Qualify For a Homestyle Loan
In order to qualify for a homestyle loan, the general requirements usually include:
- A credit score of 640 or higher
- A debt-to-income, (DTI), ratio of 50%
- A down payment of at least 5% is required
- Improvements and repairs must be added to your property value
Get Assistance With a Homestyle Loan
Sometimes your ideal home may require some maintenance and repair. If you are looking to enhance your home or purchase a new home that needs some upkeep in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage can help. Contact our office today to understand your homestyle loan financing options.