St. Louis Mortgage Help

Home Improvement, Renovation, Rehab Refinance

May 31st, 2012 3:18 PM by Bob Rutledge

You want to make improvements to your home but you are short ofFHA 203k Refinance available cash or you just prefer not to use your savings. Your contractor can't finance the costs of your home improvements or your contractor can finance the renovation work but they want an arm and a leg to do so.

So now what do you do? Have you considered refinancing or a second mortgage? A second mortgage will work if you have a ton of equity in your current home, but in today's market having upwards of 30% or more equity in your house is unusual. As a mortgage lender I have had a lot of success helping home owners refinance their current mortgage to a low interest rate plus provide them with the additional funds to improve their homes.

My loan of choice is the FHA 203k Renovation Mortgage, because the 203 k refinance program allows homeowners to borrow 97.75% of the after completed value to make improvements to a home. In addition to rolling in all closing costs and escrows, it offers homeowners greater borrower capacity than any other program currently available, including HELOC loans.

By using the home's after completed value homeowners can be eligible for a larger a larger renovation budget than those offered through a traditional mortgage loan or home equity line of credit. Traditional home loans use the current home's value, without considering future improvements to establish the maximum loan to value ratio.

What Home Improvements Can Be Made with the FHA 203k Loan?

For the most part if you can consider it, more than likely it can be done with the FHA 203k Renovation Home Improvement Home Loan. The biggest exception to this are luxury items such as swimming pools, tennis courts, hot tubs, and barbecue/fire pits, these types are items are not eligible.

I have had home owners make additions to their homes, add a garage, a couple have added a second floor to their ranch homes. But I have had some only want to use the program to update their appliances, or other smaller work to improve their home. The minimum improvement cost is $5,000 the maximum you can borrower with the FHA 203k loan is the established FHA maximum loan amount for the area the home is located.

  • Structural Alterations and Reconstruction (e.g.) repair structural damage, additions, installations, finish basements or attics.
  • Changes for Improved Function and Modernization, remodeling, installation and purchase of appliances, dish washer, stove and/or range, refrigerator, washer, dryer, or microwave.
  • Elimination of Health and Safety Hazards, lead paint removal, mold remediation, etc.
  • Changes for Aesthetic Appeal and Updating, new exterior siding, adding a second story, porch, carport or garage.
  • Reconditioning or Replacement of Plumbing or Heating and Cooling Systems
  • Installation of Well and/or Septic System
  • Roofing, Gutters and Downspouts
  • Flooring, Tile or Carpeting
  • Energy Conservation Improvements
  • Major Landscape Work and Site Improvements, decks, patio, correction of grading and drainage, repair of existing sidewalks and driveways. Tree Removal too!

If you are looking to make improvements to your home in and around the St. Louis and St. Charles area, actually I have done these loans all over the State of Missouri, I would welcome the opportunity to discuss with you all of your options. You can contact me at 314-628-2218.

With today's interest rates being so low this may be your best chance to make the improvements you have always wanted to make to your home plus lower your interest rate on your existing mortgage!

Posted in:General
Posted by Bob Rutledge on May 31st, 2012 3:18 PM


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Bob Rutledge Mortgage

Loan Officer NMLS#: 297044

New American Funding 12321 Olive Blvd, ste 150
St. Louis, MO 63141