Monday, December 10, 2018 / by Shaun Radcliffe
What is a Renovation Purchase Loan?
Shaun : Hi, Shaun Radcliffe with Radcliffe & Associates, Global Luxury, Coldwell Banker, and I’m here today with Glenn Hemry from LoanDepot. We’re going to speak today about a renovation purchase loan.
So, Glenn, what is a renovation purchase loan?
Glenn : So, a renovation purchase loan is a great program where you can add in the improvements of the property, maybe some things that you want to do to the home when you purchase it, you add those into your loan.
Shaun : Okay, and so, what type of items can be improved when I purchase this property?
Glenn : Items you can include are, it could be as little as paint and carpet. It could be remodeling a bathroom or kitchen, maybe updating a bathroom or kitchen, or we’ve even gone as far as adding a second story on a home.
Shaun : Oh, wow. And is this only for conventional loans?
Glenn : No, actually, this can be FHA, conventional and we also have a VA renovation program, as well.
Shaun : Oh, interesting. And so, when I get the loan and I close on the property, what time frame do I have to execute the improvements?
Glenn : So, the work begins right after closing, so we close this as a normal purchase loan. Work begins right after closing. We look at three to six months. Obviously, if we’re adding a second story, we can add some time to that.
Shaun : And so, with the renovation loan, do I have to use a LoanDepot contractor, or can I use somebody that I have a relationship with already?
Glenn : So, we can’t refer out the contractor, so the customer would find their own contractor. We do look at an approval process. It’s basically licensing and an insurance. So, we look at those two items.
Shaun : Okay. And so, how does the contractor get paid?
Glenn : So, the contractor gets paid through draws. So, depending on how much work we’re doing, contractor can get a draw right in the very beginning and then that final draw is done once the property is completely done and the buyer is happy with it, they get their final payment.
Shaun : Okay, perfect. And then when I get my monthly statement from LoanDepot, do I have two payments, or is it one?
Glenn : No, the great thing about it, it’s actually added as one payment. So, they’re making one mortgage payment and that includes the renovation financing.
Shaun : Okay, perfect. So, if I wanted to learn more about this, how would people get in touch with you?
Glenn : So, you can reach me at my cell number 714-371-8482, email firstname.lastname@example.org.
Shaun : Well, thanks so much for the information. Of course, if you have any questions regarding the renovation loan, reach out to Glenn, or any questions regarding buying or selling a home in today’s market, I can be reached at 714-497-0160. Thank you so much.
Glenn : Thanks, Shaun