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Inhabit Missoula
2800 S. Reserve St.,
Missoula, MT 59801

Office Phone: (406) 370-4144
Fax: (406) 541-6551

About Inhabit Missoula

We’re proud of our opportunity to offer over 70 years of combined real estate experience to our clients. Our combined families have been in Montana since the early 1900s and are on our 5th generation here in Missoula. We’ve seen our town grow over the years and pay close attention to local issues, trends, and market fluctuations. Missoula has always been our home and we’d like to help make it yours.

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Home Renovation Loan Qualification Tips

Are you interested in making renovations to your home? Maybe you need an extra bathroom or want to add a larger garage. These renovations can rack up expense. You might need a loan. How do you qualify for a home renovation loan?

Qualifying for a home renovation loan depends on which loan you want. Are you adding luxury items, like a sauna or a swimming pool? Fannie Mae’s Homestyle loans cover large renovations with luxury items. Or maybe you’re doing a large renovation but not adding any luxury items. In that case, a FHA 203(k) loan would fit you best. FHA Title I loans work for smaller projects, like making your home wheelchair accessible.

4 Tips on How to Qualify for a Home Renovation Loan

  1. How’s your credit score? — Your credit score will decide which loan you qualify for. FHA 203(k) needs a credit score of 580 or higher. HomeStyle loans usually ask for a credit score of 680 or higher. The Title I loan requires a score over 700. Remember, you can always improve your creditworthiness if your score isn’t high enough.
  2. Is a down payment needed? — A FHA 203(k) loan needs at least 3.5% down, whereas a HomeStyle needs a minimum of 5%. A down payment on a FHA Title I loan is rarely if ever needed. Make sure to start saving for a down payment now, while you’re deciding which loan you want.
  3. Do you have to live in your home? — You need to occupy your home to qualify for a FHA 203(k) loan. A HomeStyle loan is for both owner-occupants and investors. The Title I loan doesn’t require occupying the home or even owning it. Keep in mind, you would need a long-term lease if you didn’t own your home.
  4. Do you need to have equity in your home? — A FHA Title I loan doesn’t require you to have any equity in your home. Whereas the FHA 203(k) and the HomeStyle do need to know how much equity you have. Your equity, or the lack thereof, will determine the down payment they will require.

There you have it, a quick break down on how to qualify for a home renovation loan. Remember, meet with your lender early and ask questions. You might need time to improve your creditworthiness or save for a down payment. Have fun renovating your home!

Sources:

  • These mortgages pay for home renovations. (n.d.). Retrieved October 20, 2016.
  • Fixing Up Your Home and How to Finance It. (n.d.). Retrieved October 20, 2016.
  • How to finance a fixer-upper. (2016, October 03). Retrieved October 20, 2016.
  • What is the credit score requirement for FHA Title 1 home improvement loans?. (n.d.). Retrieved October 20, 2016.

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About Inhabit Missoula

We’re proud of our opportunity to offer over 70 years of combined real estate experience to our clients. Our combined families have been in Montana since the early 1900s and are on our 5th generation here in Missoula. We’ve seen our town grow over the years and pay close attention to local issues, trends, and market fluctuations. Missoula has always been our home and we’d like to help make it yours.

Sincerely,
Lorin Peterson, Real Estate Broker

About Inhabit Missoula

We’re proud of our opportunity to offer over 70 years of combined real estate experience to our clients. Our combined families have been in Montana since the early 1900s and are on our 5th generation here in Missoula. We’ve seen our town grow over the years and pay close attention to local issues, trends, and market fluctuations. Missoula has always been our home and we’d like to help make it yours.

Sincerely,
Lorin Peterson, Real Estate Broker

Contact Us

Inhabit Missoula
2800 S. Reserve St.,
Missoula, MT 59801

Office Phone: (406) 370-4144
Fax: (406) 541-6551

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2800 S. Reserve St., Missoula, MT 59801

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