Home Improvement Financing
More Americans are thinking of purchasing homes that are in need of repair and renovation, or are choosing to improve or enlarge their current homes. This trend has led to an increased need for mortgages that provide affordable home improvement financing. HomeStyle® is a suite of home improvement mortgages designed to provide affordable financing for modest to major repairs and renovations.
You can use HomeStyle mortgages to purchase and renovate a home with just one loan. You also can refinance your home with additional renovation money included in the new loan or take out a second mortgage loan for repairs or renovations.
If you've been considering a home improvement project, a HomeStyle home improvement mortgage may be right for you. What do you do first? Do you talk to a lender, look for a contractor, or start estimating the cost of the renovation?
The most common approach is to think about the improvements you want to make and why. Do you want to expand your kitchen to make it more functional? Do you want to add an addition so your family has more room? Would cosmetic changes help make your house more marketable when you eventually decide to sell it?
Organize a wish list of improvements and rate them from least to most important — this will help when it comes time to meet with your lender and develop a loan amount for your project.
You may want to take a step back and look at your house as it relates to others in the neighborhood. What is its value now? How would a new kitchen or room addition affect that value? Would an increase in value help you sell your home at a higher price in the future?
Improving your home can be financially beneficial. Interest paid on a first or second mortgage loan is usually tax deductible with certain limitations, unlike the interest charged on a credit card account or a personal loan. The cost of improvements may also be deducted from any profit you make when you sell your home. Homeowners should keep track of these expenses and consult a tax advisor for details on Internal Revenue Service (IRS) guidelines.
HomeStyle is a registered trademark of Fannie Mae.
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