{"id":23100,"date":"2026-01-28T07:58:45","date_gmt":"2026-01-28T07:58:45","guid":{"rendered":"https:\/\/budgetadirect.com\/?p=23100"},"modified":"2026-01-28T07:58:45","modified_gmt":"2026-01-28T07:58:45","slug":"mortgages-and-loans-for-home-renovations","status":"publish","type":"post","link":"https:\/\/budgetadirect.com\/?p=23100","title":{"rendered":"Mortgages And Loans For Home Renovations"},"content":{"rendered":"<div xmlns:default=\"http:\/\/www.w3.org\/2000\/svg\">\n<div id=\"block_f8bd0a83863e223a3e7670ed963721a1\" class=\"key-takeaways sm:border-l-4 border-(--accent) sm:pl-8 my-8 relative\" style=\"--accent: var(--color-blue-medium)\">\n    <!-- htmlmin:ignore --><\/p>\n<h2 class=\"heading-4 mt-0 mb-4 text-crop-none max-sm:flex max-sm:items-center max-sm:gap-4\" id=\"key-takeaways\" data-position=\"0\" data-beam-element-viewed=\"\" data-id=\"br-h2-0-onpage-placement\" data-type=\"h2\" data-location=\"Editorial\" data-name=\"h2_all\" data-text=\"Key takeaways\" data-outcome=\"\">\n    <span class=\"shrink-0\">Key takeaways<\/span><br \/>\n        <span class=\"max-sm:h-0.5 max-sm:w-full max-sm:w-full max-sm:bg-(--accent) max-sm:rounded-full max-sm:block\"\/><br \/>\n    <\/h2>\n<p>    <!-- htmlmin:ignore --><\/p>\n<ul class=\"flex flex-col text-gray-700 mb-0 gap-2 list-disc\">\n<li class=\"pl-4 relative marker:text-(--accent)\">\n                                                            There are several ways to finance home renovations, including renovation mortgages, home equity loans and personal loans.\n                                                <\/li>\n<li class=\"pl-4 relative marker:text-(--accent)\">\n                                                            Borrowing makes the most sense when repairs are urgent or when improvements will increase your home\u2019s value.\n                                                <\/li>\n<li class=\"pl-4 relative marker:text-(--accent)\">\n                                                            Compare loan options carefully, considering interest rates, fees and the amount of home equity you have.\n                                                <\/li>\n<\/ul>\n<\/div>\n<p>Whether you\u2019re dreaming of a chef\u2019s kitchen, a luxury spa bathroom or want to tackle something less glamorous like a cracked foundation, any big home improvement is going to require some serious cash.<\/p>\n<p>It\u2019s not just the obvious expenses: maintenance and other hidden costs can add up fast. In fact,\u00a0unexpected costs top the list of complaints for the 42% of homeowners who have at least one regret about buying their current home, according to Bankrate\u2019s 2025 Home Affordability Report.<\/p>\n<p>Luckily, a home renovation loan could be your path to getting the project underway sooner than you think. This guide outlines funding options and how to get a loan for a home renovation.<\/p>\n<h2 id=\"what-is\" data-position=\"1\" data-beam-element-viewed=\"\" data-id=\"br-h2-1-onpage-placement\" data-type=\"h2\" data-location=\"Editorial\" data-name=\"h2_all\" data-text=\"What is a home renovation loan?\" data-outcome=\"\">What is a home renovation loan?<\/h2>\n<p>A home renovation loan is a type of financing used to cover the costs of upgrading, remodeling and repairing a home. Something of a generic term, it can be a regular personal loan, but it often takes the form of secured debt, too \u2014 specifically, a loan that uses the home you\u2019re aiming to improve as collateral.<\/p>\n<p>Specifically, a home renovation loan can be:<\/p>\n<ul class=\"wp-block-list\">\n<li>A purchase mortgage, with additional money for home improvements<\/li>\n<li>A mortgage product backed by a government agency (FHA, VA or government-sponsored enterprise such as Fannie Mae or Freddie Mac) that includes funds to purchase and upgrade a residence<\/li>\n<li>A refinance of your current mortgage with a cash payout<\/li>\n<li>A home equity loan or home equity line of credit (HELOC)<\/li>\n<li>A personal loan, sometimes referred to as a home improvement loan<\/li>\n<\/ul>\n<p>Some home renovation loans or refis require the borrower to have a certain amount of equity in the home (the main exception being personal loans, which are typically unsecured).<\/p>\n<h2 id=\"when-to-consider\" data-position=\"2\" data-beam-element-viewed=\"\" data-id=\"br-h2-2-onpage-placement\" data-type=\"h2\" data-location=\"Editorial\" data-name=\"h2_all\" data-text=\"When should you consider a home renovation loan?\" data-outcome=\"\">When should you consider a home renovation loan?<\/h2>\n<p>There are several scenarios where you may want to consider a loan for a home renovation, including:<\/p>\n<ul class=\"wp-block-list\">\n<li>\n<strong>Insufficient funds<\/strong>: Your home needs an urgent repair (a plumbing issue, for instance) or is on the verge of needing one (sinking foundation) and you don\u2019t have the cash on hand to pay a contractor. Or it\u2019s a discretionary undertaking, but you don\u2019t want to blow your budget or deplete your savings account for it. In these cases, a renovation loan can make sense, especially given that only 47% of Americans say they can cover a $1,000 emergency expense, according to Bankrate\u2019s 2026 Annual Emergency Savings Report.\u00a0<\/li>\n<li>\n<strong>Fixer-upper<\/strong>: If you have fallen in love with a fixer-upper or as-is home \u2014 one with a low asking price that needs serious work \u2014 some home renovation loans can provide funds to both purchase and restore the residence.<\/li>\n<li>\n<strong>Home equity<\/strong>: One key way to increase the worth of your ownership stake in your home (besides paying down your mortgage) is to improve the home itself. Strategically-selected renovations \u2014 like modernizing the kitchen or adding a bathroom \u2014 not only enhance your day-to-day living experience, but also raise the long-term value of your property.<\/li>\n<li>\n<strong>Fair market value:<\/strong> If you\u2019re looking to sell your home, renovations can be a game-changer. Projects that expand living space or enhance functionality can make your home more appealing to buyers and command a higher asking price.<\/li>\n<\/ul>\n<h2 id=\"loan-options\" data-position=\"3\" data-beam-element-viewed=\"\" data-id=\"br-h2-3-onpage-placement\" data-type=\"h2\" data-location=\"Editorial\" data-name=\"h2_all\" data-text=\"Home renovation loan options\" data-outcome=\"\">Home renovation loan options<\/h2>\n<div class=\"w-full overflow-x-auto\">\n<table style=\"border-style:none;border-width:0px\" class=\"wp-block-table is-style-stripes wrapped\">\n<thead>\n<tr>\n<th>Loan type<\/th>\n<th>When to use<\/th>\n<th>Minimum credit score<\/th>\n<th>Additional considerations<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Fannie Mae HomeStyle<\/td>\n<td>For any project<\/td>\n<td>None<\/td>\n<td>Renovation costs limited to 75% of expected value of the property after renovation<\/td>\n<\/tr>\n<tr>\n<td>Freddie Mac CHOICERenovation loan<\/td>\n<td>To purchase and renovate a new home or fund renovations on an existing home<\/td>\n<td>None<\/td>\n<td>Repairs or renovations cannot exceed 75% of appraised value of home after upgrades made<\/td>\n<\/tr>\n<tr>\n<td>FHA 203(k) loan<\/td>\n<td>For many projects, but they can\u2019t be luxury renovations and must be for your primary home<\/td>\n<td>580<\/td>\n<td>Must borrow at least $5,000 and project must be completed within 12 months<\/td>\n<\/tr>\n<tr>\n<td>Home equity loan\/HELOC<\/td>\n<td>For any project, but potential tax advantage if used to substantially improve the home<\/td>\n<td>Varies by lender<\/td>\n<td>Might pay extra fees to close, but interest rates tend to be competitive<\/td>\n<\/tr>\n<tr>\n<td>Cash-out refinance<\/td>\n<td>For any project<\/td>\n<td>Varies by lender<\/td>\n<td>Need at least 20% equity to qualify and must pay closing costs<\/td>\n<\/tr>\n<tr>\n<td>Personal loan<\/td>\n<td>For any project<\/td>\n<td>Varies by lender<\/td>\n<td>Some loans capped at $50,000; interest rates tend to be higher<\/td>\n<\/tr>\n<tr>\n<td>VA renovation loan<\/td>\n<td>To purchase or refinance a primary residence needing repairs\/improvements<\/td>\n<td>\n<p>620<\/p>\n<\/td>\n<td>Available to eligible veterans and active-duty; renovation must improve livability<\/td>\n<\/tr>\n<tr>\n<td>USDA renovation loan<\/td>\n<td>To purchase or refinance a rural home needing repairs\/upgrades<\/td>\n<td>640<\/td>\n<td>Must be in USDA-eligible rural areas; borrower income limits apply<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h3>Fannie Mae HomeStyle Renovation loan<\/h3>\n<p>The Fannie Mae HomeStyle Renovation loan allows borrowers to either buy a place that needs repairs or refinance their existing home loan and get money for improvements.<\/p>\n<p>One advantage of a HomeStyle loan is that it\u2019s a single debt with one monthly payment; you don\u2019t have to take out a loan for the mortgage and another loan for home repairs. Getting one loan cuts down on time and closing costs.<\/p>\n<p>The loan money goes into a separate escrow account that\u2019s used to pay contractors. Borrowers don\u2019t have access to those funds.<\/p>\n<p>You can use the Fannie Mae HomeStyle loan to improve a vacation home or investment property, and any renovation or repair is eligible for funding, as long as it\u2019s permanently affixed to the property and adds value to it.<\/p>\n<div id=\"block_12e012a1b19614abcdd18ddf83d81312\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div><\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h3 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h3>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Qualify with a down payment as low as 3% if you\u2019re a first-time buyer<\/li>\n<li>Potential for lower interest rates and shorter repayment terms than conventional improvement loans<\/li>\n<li>Conveniently includes the home loan\u2019s principal amount and home renovation funds in one loan with one set of closing costs.<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h3 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h3>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Renovation costs are limited to 75% of the \u201cafter-repaired value\u201d of the home<\/li>\n<li>Renovations must be completed within 12 months from the date your loan closes<\/li>\n<li>Borrowers can\u2019t directly access funds<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Despite financing both your home\u2019s principal debt and renovation, the Fannie Mae HomeStyle refinance loan is only one loan with one set of closing costs. Fees and closing costs may be higher than other types of mortgages. However, through Fannie Mae\u2019s Community Seconds program, you may be able to borrow up to 5% of your home\u2019s value to help cover the down payment and closing costs.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            In a competitive real estate market, a Fannie Mae HomeStyle Renovation loan may not be ideal if you\u2019re looking to secure a deal fast. These loans require some extra work upfront before your loan is approved \u2014 and before you can even submit an offer on a home. For example, your contractor must establish a construction schedule and plans for your renovation. You must also submit a property appraisal known as an \u201cas-completed\u201d appraisal.\n        <\/p>\n<\/div>\n<\/li>\n<\/ul>\n<h3>Freddie Mac CHOICERenovation loan<\/h3>\n<p>CHOICERenovation is a loan option from Freddie Mac that allows you to finance your home purchase and renovation expenses with a single loan. It\u2019s also ideal for homeowners interested in a no-cash-out refinance solution to enhance or repair their current property.<\/p>\n<p>This loan option allows you to finance renovations up to 75% of the home\u2019s post-improvement value. The renovations must be to an existing home.<\/p>\n<p>Among the eligible property types allowed are one- to four-unit primary residences, manufactured homes and second homes. One-unit investment properties, units located in planned unit developments and condos are also eligible.<\/p>\n<p>For smaller-scale projects, Freddie Mac also offers the CHOICEReno eXPress Mortgage loan. Renovations must be completed within 180 days of the mortgage note date. If your home\u2019s location is deemed a Duty to Serve high-needs area, you could get up to 15% of the home\u2019s value in funds for renovations.<\/p>\n<div id=\"block_99a7af839b4ef8ee6132d04a3d8073b8\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/circle-check.svg.svg+xml\" alt=\"Green circle with a checkmark inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Available for primary homes, second homes and investment properties<\/li>\n<li>Ability to finance a home purchase and renovations with a single loan<\/li>\n<li>Can include resilience upgrades to protect existing homes from natural disasters<\/li>\n<li>Supports the construction of accessory dwelling units (ADUs)<\/li>\n<li>Allows home purchases with 3% down (when combined with Freddie Mac\u2019s Home Possible or HomeOne programs)<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Not all lenders provide these loans<\/li>\n<li>Repairs and renovations are limited to a maximum of 75% of the lower amount of the purchase price plus renovation expenses or the post-renovation value of the property<\/li>\n<li>Funds cannot be used to demolish an existing structure and construct a new dwelling or to pay for items not permanently affixed to the property (except new appliances)<\/li>\n<li>Second homes have a higher loan-to-value requirement (90%), while investment properties require an 85% LTV<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Closing costs can range from 2% to 5% of the loan amount, but you\u2019ll only need to pay one set of closing costs.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<div class=\"Accordion-content text-gray-700 px-3 pb-4 sm:px-6 sm:pb-6\">\n<p>Before granting your mortgage application, the lender will evaluate your financial status and proposed renovation plans.<\/p>\n<p>Upon approval, you\u2019ll need to establish an escrow account to hold funds for renovations, reserves for unexpected expenses and provisions for up to six months of mortgage payments. These funds are securely held until the closing, with payments to your contractor being made in stages as the work advances. After the closing, the lender may opt to release up to half of the material expenses.<\/p>\n<\/div>\n<\/div>\n<\/li>\n<\/ul>\n<h3>FHA 203(k) loan<\/h3>\n<p>Like Fannie and Freddie\u2019s offerings, the FHA 203(k) loan \u2014 a government-backed conventional rehab loan \u2014 funds the home purchase and its renovations. The Federal Housing Administration insures this loan, and its goal is to create more options for homeowners or buyers of homes that need rehabilitation and repair.<\/p>\n<p>Multiple home types are eligible for 203(k) loans, including single-family homes, two- to four-unit homes, \u00a0townhomes, eligible condos, mixed-use properties that are primarily residential, and manufactured homes titled as real estate.<\/p>\n<p>There are two types of FHA 203(k) loans:<\/p>\n<ol class=\"wp-block-list\">\n<li>Limited 203(k) loans are capped at $75,000 for minor repairs and home upgrades.<\/li>\n<li>Standard 203(k) loans have a minimum cost of $5,000 for the major rehabilitation or repair of single-family homes.<\/li>\n<\/ol>\n<div id=\"block_3a430c745ad3bcb604064f3dd35645a2\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/circle-check.svg.svg+xml\" alt=\"Green circle with a checkmark inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Income and down payment requirements are less stringent than other types of mortgage loans<\/li>\n<li>One mortgage covers the purchase of your home and renovations<\/li>\n<li>Down payment as low as 3.5%<\/li>\n<li>You may be eligible for a larger tax deduction<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Mortgage insurance premium (MIP) required<\/li>\n<li>You can only use it for a primary residence<\/li>\n<li>Any remodeling is limited to the FHA\u2019s list of eligible projects<\/li>\n<li>The process involves more paperwork than other types of mortgage loans<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Closing costs generally range from 3% to 5% of the purchase price.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<div class=\"Accordion-content text-gray-700 px-3 pb-4 sm:px-6 sm:pb-6\">\n<p>If the process of getting an FHA 203(k) loan seems overwhelming, take comfort that a qualified 203(k) consultant will guide you every step of the way.<\/p>\n<p>Also, as much as you want to get started remodeling the kitchen or another part of your home, the lender will require you to address all safety and health hazards first, such as lead-based paint, termites and broken windows.<\/p>\n<p>The FHA 203(k) loan has a long list of eligible improvements, such as replacing a roof, flooring and plumbing, removing safety and health hazards and upgrading to accommodate a person living with a disability. However, the loan can\u2019t be used for a luxury or purely discretionary improvement, such as building a backyard swimming pool or tennis court. Also, the loan is also only for primary homes, not second homes or vacation residences.<\/p>\n<\/div>\n<\/div>\n<\/li>\n<\/ul>\n<h3>Home equity loan or HELOC<\/h3>\n<p>A home equity loan is a fixed-rate, lump-sum loan with monthly payments that remain the same for the loan term. A home equity line of credit, or HELOC, usually has an adjustable rate, along with a set credit limit and a revolving balance. This loan works well for homeowners who have several large contractor payments due over time on a big home improvement project.<\/p>\n<p>Generally, you\u2019ll receive one lump sum payment with a home equity loan, while HELOCs have a draw period of five to 10 years, during which you can access funds.<\/p>\n<div id=\"block_dcb7ec13cc9f651557c561418a317a32\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/circle-check.svg.svg+xml\" alt=\"Green circle with a checkmark inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Competitive interest rates, especially compared to personal loans\/credit cards<\/li>\n<li>Home equity loans come with fixed interest rates and payment amounts<\/li>\n<li>With a HELOC, you can draw funds as you need and only pay interest on what you draw<\/li>\n<li>You may be able to deduct the interest if you itemize on your tax return<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>If you fail to make payments, the lender could foreclose on the home<\/li>\n<li>Home equity loans don\u2019t allow you to draw funds only as needed<\/li>\n<li>HELOC interest rates typically are variable, meaning your rate and payment can increase<\/li>\n<li>Qualifications can be more stringent<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Closing costs vary from 2% to 5% of the loan amount. A $50,000 loan might cost you between $1,000 and $2,500.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<div class=\"Accordion-content text-gray-700 px-3 pb-4 sm:px-6 sm:pb-6\">\n<p>With your home serving as collateral, you might only consider a home equity loan or HELOC if you expect you can comfortably repay the loan. A home equity loan is typically easier to add to your budget since the interest rates are usually fixed with the same monthly payment. By contrast, HELOC loans typically have variable interest rates that may fluctuate month to month.<\/p>\n<p>If you borrow against your home equity to renovate your home, you can do pretty much any project you want, but you should consider whether the project will add to your home\u2019s value. For example, new garage doors and a remodeled kitchen are considered high-impact upgrades that can help you recoup more of your investment when you sell.<\/p>\n<\/div>\n<\/div>\n<\/li>\n<\/ul>\n<h3>Cash-out refinance<\/h3>\n<p>A cash-out refi allows homeowners to refinance their mortgage for a higher amount than they owe on it, based on how much equity they have, and take out the difference in cash. A cash-out refinance can have the double benefit of letting you refinance a higher-rate mortgage to one with a lower rate while pulling out cash to spruce up your property. A refinance works well if you can get a lower interest rate than the one on your current mortgage. A lower refinance rate and an increase in home value from renovations are great long-term benefits.<\/p>\n<div id=\"block_449321b5ed5842f8e343c47225b97054\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/circle-check.svg.svg+xml\" alt=\"Green circle with a checkmark inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Funds can be used for home improvement projects, debt consolidation and various other purposes<\/li>\n<li>You may be able to get a lower interest rate or change your loan term<\/li>\n<li>The cash-out is included in the new mortgage, so there are no separate payments to make<\/li>\n<li>A portion of the cash-out interest may be tax-deductible<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>You must use your home as collateral<\/li>\n<li>You must have at least 20% equity in your home to be eligible<\/li>\n<li>Closing costs can be high<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Expect to pay about 2% to 5% of the new loan amount in closing costs.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<div class=\"Accordion-content text-gray-700 px-3 pb-4 sm:px-6 sm:pb-6\">\n            Since a cash-out refinance involves taking out a new mortgage, you\u2019ll have a new loan with new terms. If you select an adjustable-rate mortgage (ARM), your interest rate and monthly payment could change every month, quarter, year, three years or five years, depending on your loan\u2019s adjustment period.\n        <\/div>\n<\/div>\n<\/li>\n<\/ul>\n<h3>Personal loan<\/h3>\n<p>If tapping into home equity isn\u2019t an option, you may want to consider getting a personal loan. Unlike a refi or home equity loan, a personal loan is unsecured, so you don\u2019t have to use your home or any other asset as collateral. Loan eligibility is based on your credit score, income and financial history. Consumers with \u201cvery good\u201d FICO credit scores of 740 and up get the best interest rates on personal loans, and some lenders extend personal loans to consumers with credit scores as low as 580, though the rates on those tend to be much higher.<\/p>\n<div id=\"block_efdf3638ade73507fb111eaacb295e3e\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/circle-check.svg.svg+xml\" alt=\"Green circle with a checkmark inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Interest rates are usually lower than credit cards<\/li>\n<li>You can consolidate debt from multiple high-interest credit cards into one loan with lower interest rates<\/li>\n<li>You can receive funding as fast as the same day or the next business day<\/li>\n<li>Most personal loans are unsecured, meaning you won\u2019t have to offer your home as collateral<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Typically have higher interest rates than home equity loans, HELOCs and cash-out refis (since the loan is unsecured)<\/li>\n<li>You may incur several fees, such as a loan origination fee, prepayment penalty and an appraisal fee<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            These loans often include origination fees ranging from 2% to 5% of the loan amount.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<div class=\"Accordion-content text-gray-700 px-3 pb-4 sm:px-6 sm:pb-6\">\n<p>You can reduce the amount of your debt by paying off high-interest credit card debt with a lower-interest personal loan. However, if you\u2019re taking out a personal loan to pay for a large expense, you\u2019ll increase your debt load, making it harder to qualify for credit products later on. Use Bankrate\u2019s personal loan calculator to see how much a personal loan might cost you in interest.<\/p>\n<p>Personal loans also give the borrower lots of leeway regarding the type of improvements that they can make. Lenders also have a lot of leeway regarding the amount of interest they can charge you, though. Simply put, if you\u2019re borrowing money at, say, a 25% interest rate, you\u2019re going to pay far more than might be necessary to complete your project.<\/p>\n<\/div>\n<\/div>\n<\/li>\n<\/ul>\n<h3>VA renovation loan<\/h3>\n<p>A VA renovation loan is a government-backed mortgage option that allows eligible U.S. military service members, veterans and surviving spouses to finance both the purchase or refinance of a home and the cost of repairs in one loan.<\/p>\n<p>Designed to help borrowers bring a property up to VA minimum property standards, this loan eliminates the need for a second loan or high-interest credit for renovation expenses.<\/p>\n<p>It covers non-structural repairs, such as roof replacement, HVAC upgrades, window replacement and even kitchen or bathroom upgrades. The work must improve the property\u2019s safety or livability. Luxury renovations (like pools or hot tubs) typically aren\u2019t allowed.<\/p>\n<div id=\"block_0923dedbcee8f4c213ab8b476568a0d3\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/circle-check.svg.svg+xml\" alt=\"Green circle with a checkmark inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Combines purchase and renovation into one loan\/payment<\/li>\n<li>No down payment or PMI required<\/li>\n<li>Competitive interest rates<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Must use a VA\u2011approved contractor<\/li>\n<li>Work must improve livability<\/li>\n<li>Limited number of lenders offer this product<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<div class=\"Accordion-content text-gray-700 px-3 pb-4 sm:px-6 sm:pb-6\">\n            VA renovation loans require no down payment; however, a VA funding fee, which ranges from 1.25% to 3.3%, will apply depending on your military service status and whether it\u2019s your first time using the benefit. Borrowers are also responsible for the usual mortgage closing costs. Renovation costs are generally capped at around $50,000, and an additional funding fee may be associated with the renovation portion of the loan.\n        <\/div>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<div class=\"Accordion-content text-gray-700 px-3 pb-4 sm:px-6 sm:pb-6\">\n            To qualify for a VA renovation loan, you must obtain a VA certificate of eligibility that verifies your entitlement to VA loan benefits. Lenders typically require a minimum credit score of 620 or higher. All repairs and renovations must comply with the VA\u2019s minimum property requirements to ensure the home is safe, structurally sound and sanitary. Additionally, all renovation work must be completed on-site by a licensed contractor in accordance with VA guidelines.\n        <\/div>\n<\/div>\n<\/li>\n<\/ul>\n<h3>USDA renovation loan<\/h3>\n<p>A <u>USDA renovation loan<\/u> is a type of government-insured mortgage that allows qualified low- to moderate-income borrowers in eligible rural areas to purchase and renovate a home with a single mortgage.<\/p>\n<p>Offered by the U.S. Department of Agriculture, USDA loans are designed to make homeownership more affordable in underserved regions, particularly for homes that require work to meet livable standards. The loan can sometimes be used to purchase homes that need repairs and come in two main types:<\/p>\n<ul class=\"wp-block-list\">\n<li>\n<strong>Direct loans:<\/strong> These loans are issued directly by the USDA to low and very-low-income applicants and typically offer subsidized interest rates.<\/li>\n<li>\n<strong>Guaranteed loans:<\/strong> These loans are issued by approved lenders and backed by the USDA, helping moderate-income borrowers qualify for mortgages with no down payment.<\/li>\n<\/ul>\n<p>For homeowners needing to make essential repairs, such as fixing a roof or removing health hazards, the USDA also offers single-family housing repair loans and grants (also known as the Section 504 Home Repair program). Under this program, eligible homeowners can receive loans up to $40,000 or grants up to $10,000.<\/p>\n<div id=\"block_4891854e4fae67a42fb251268c57762b\" class=\"flex flex-col gap-8 my-6 not-wysiwyg\">\n<div class=\"ProsAndConsTable\">\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/circle-check.svg.svg+xml\" alt=\"Green circle with a checkmark inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Pros<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>No down payment required<\/li>\n<li>Generally has lower mortgage insurance rates compared to FHA loans<\/li>\n<li>Combines repair costs and purchase financing into one loan<\/li>\n<\/ul><\/div>\n<div class=\"ProsAndConsItem\">\n<div class=\"ProsAndConsItem-headerContainer flex items-center gap-2\">\n<div>\n                <img decoding=\"async\" src=\"https:\/\/budgetadirect.com\/wp-content\/uploads\/2025\/06\/remove-circle.svg.svg+xml\" alt=\"Red circle with an X inside\"\/>\n            <\/div>\n<p>            <!-- htmlmin:ignore --><\/p>\n<h4 class=\"ProsAndConsItem-header\">\n    Cons<br \/>\n    <\/h4>\n<p>    <!-- htmlmin:ignore -->\n        <\/div>\n<ul class=\"ProsAndConsItem-list\">\n<li>Limited to eligible rural areas<\/li>\n<li>Limited to primary residences<\/li>\n<li>Cannot be used for luxury additions<\/li>\n<\/ul><\/div>\n<\/div><\/div>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-costs-and-fees', 'heading-costs-and-fees']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-costs-and-fees')\" :aria-controls=\"$id('panel-costs-and-fees')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Costs and fees<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-costs-and-fees')\" :aria-labelledby=\"$id('heading-costs-and-fees')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            USDA renovation loans require no down payment. Mortgage insurance costs tend to be lower than FHA loans, making it a more affordable option for many borrowers. Closing costs may be financed into the loan amount.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-other-considerations', 'heading-other-considerations']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-other-considerations')\" :aria-controls=\"$id('panel-other-considerations')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Other considerations<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-other-considerations')\" :aria-labelledby=\"$id('heading-other-considerations')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Applicants must meet USDA area and income eligibility requirements, and the home must be a single-family residence located in a USDA-designated rural area. Licensed contractors must be hired to complete the renovation work.\n        <\/p>\n<\/div>\n<\/li>\n<\/ul>\n<h2 id=\"how-to-choose\" data-position=\"4\" data-beam-element-viewed=\"\" data-id=\"br-h2-4-onpage-placement\" data-type=\"h2\" data-location=\"Editorial\" data-name=\"h2_all\" data-text=\"How to choose a home renovation loan\" data-outcome=\"\">How to choose a home renovation loan<\/h2>\n<p>With so many options for home renovation financing, how do you choose the right one? Here are steps to take before making the decision:\u00a0<\/p>\n<h3>1. Review your credit<\/h3>\n<p>Before applying for any loan, keep in mind that your credit plays a critical role in locking in the lowest interest rate. If you have time, consider taking steps to improve your score by paying down credit card bills and making all payments on time.<\/p>\n<h3>2. Estimate the cost of your project<\/h3>\n<p>Is this a DIY job or will you need professionals \u2014 and if so, what will your labor costs be, on top of supplies? Will you need to rent a place to live elsewhere while the project is happening? Put together a comprehensive budget. The overall cost can help you understand which loan will be best, and help you estimate your monthly payments.<\/p>\n<h3>3. Know how much equity you currently have<\/h3>\n<p>Your equity will be an important factor in determining how much you may be able to borrow. Calculate your home equity by taking your home\u2019s current market value and the subtracting the remaining balance you have on your mortgage. The amount that\u2019s left over is the equity you have accrued. Remember that typically you won\u2019t be allowed to pull out all of the available equity in your home. Most lenders limit borrowing to a percentage of the home\u2019s value.<\/p>\n<h3>4. Comparison shop<\/h3>\n<p>Just as you did with your mortgage, look at payment terms and fees from at least three different lenders. Rates and costs vary from lender to lender, so do your research (and your math) to make sure you get the best deal. Be sure to check out ratings and reviews as well.\u00a0<\/p>\n<h2 id=\"what-to-look-for\" data-position=\"5\" data-beam-element-viewed=\"\" data-id=\"br-h2-5-onpage-placement\" data-type=\"h2\" data-location=\"Editorial\" data-name=\"h2_all\" data-text=\"What to look out for when doing home renovations\" data-outcome=\"\">What to look out for when doing home renovations<\/h2>\n<p>While renovating your home may sound exciting, remember that these projects \u2014 and borrowing the money to make them a reality \u2014 can come with significant drawbacks.<\/p>\n<p>Don\u2019t let your upgrade come with any of these downsides:<\/p>\n<ul class=\"wp-block-list\">\n<li>\n<strong>Making an investment that isn\u2019t worth the cost.<\/strong> Are you planning on selling this home in the near future? Don\u2019t spend money on a home renovation that won\u2019t increase the sales price of your home by a similar or greater amount.<\/li>\n<li>\n<strong>Failing to account for extra costs.<\/strong> When considering renovations, keep in mind that the total cost will probably involve more than just labor and materials. The total often includes fees for architectural and engineering services, inspections and permits. Plus, you should expect the unexpected \u2014 additional costs, overruns, etc. \u2014 to pop up.<\/li>\n<li>\n<strong>Being unrealistic about the timeline.<\/strong> Renovating a home is not a simple task. Consider the potential implications of delays in the project. If you\u2019re renovating your kitchen, that means more take-out or dining out, both of which cost more than home cooking. If you\u2019re renovating a bedroom, it could mean more time in a rental while you wait to move back in.<\/li>\n<\/ul>\n<h2 id=\"faq\" data-position=\"6\" data-beam-element-viewed=\"\" data-id=\"br-h2-6-onpage-placement\" data-type=\"h2\" data-location=\"Editorial\" data-name=\"h2_all\" data-text=\"Home renovation loan FAQ\" data-outcome=\"\">Home renovation loan FAQ<\/h2>\n<ul class=\"Accordion w-full align\">\n<li x-id=\"['panel-what-are-the-requirements-for-renovation-loans', 'heading-what-are-the-requirements-for-renovation-loans']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-what-are-the-requirements-for-renovation-loans')\" :aria-controls=\"$id('panel-what-are-the-requirements-for-renovation-loans')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    What are the requirements for renovation loans?<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-what-are-the-requirements-for-renovation-loans')\" :aria-labelledby=\"$id('heading-what-are-the-requirements-for-renovation-loans')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Renovation loan requirements vary by loan program and lender, but most borrowers will need to meet certain criteria, including a minimum credit score (often 620 or higher), along with proof of steady income and employment history. Property requirements also play a role \u2014 some loans are limited to specific property types or may require a certain amount of equity in the home.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-what-are-the-advantages-and-disadvantages-of-a-renovation-loan', 'heading-what-are-the-advantages-and-disadvantages-of-a-renovation-loan']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-what-are-the-advantages-and-disadvantages-of-a-renovation-loan')\" :aria-controls=\"$id('panel-what-are-the-advantages-and-disadvantages-of-a-renovation-loan')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    What are the advantages and disadvantages of a renovation loan?<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-what-are-the-advantages-and-disadvantages-of-a-renovation-loan')\" :aria-labelledby=\"$id('heading-what-are-the-advantages-and-disadvantages-of-a-renovation-loan')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            The advantages of a home renovation loan include the ability to purchase properties at lower prices, as well as to combine purchase and renovation costs into a single loan. Disadvantages include credit score and income requirements and the need for an appraisal.\n        <\/p>\n<\/div>\n<\/li>\n<li x-id=\"['panel-do-renovation-loans-have-higher-interest-rates', 'heading-do-renovation-loans-have-higher-interest-rates']\" x-data=\"{ expanded: 0 }\" class=\"Accordion-item\">\n<button class=\"Accordion-titleContainer py-4 px-3 sm:px-6 group sm:py-6\" type=\"button\" :id=\"$id('heading-do-renovation-loans-have-higher-interest-rates')\" :aria-controls=\"$id('panel-do-renovation-loans-have-higher-interest-rates')\" :aria-expanded=\"expanded ? true : false\" x-on:click=\"expanded = !expanded\" :data-outcome=\"expanded ? 'open_accordion' : 'close_accordion'\"><!-- htmlmin:ignore --><\/p>\n<h3 class=\"Accordion-title my-0 mr-2 md:flex-1\">\n    Do renovation loans have higher interest rates?<br \/>\n    <\/h3>\n<p><!-- htmlmin:ignore --><span class=\"Accordion-icon Icon mb-0 block leading-none Icon--sm icon-base-blue-600\" aria-hidden=\"true\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Caret Down Icon<\/default:title><br \/>\n<default:path d=\"M12 17.152c-.33 0-.675-.131-.94-.378L3.384 9.09a1.32 1.32 0 0 1 0-1.86c.51-.51 1.351-.51 1.862 0L12 13.977l6.755-6.747c.51-.51 1.351-.51 1.862 0 .51.51.51 1.35 0 1.86l-7.694 7.684a1.295 1.295 0 0 1-.94.378H12Z\" class=\"icon-base\"\/><\/default:svg><\/span><\/button><\/p>\n<div class=\"Accordion-contentWrapper\" :id=\"$id('panel-do-renovation-loans-have-higher-interest-rates')\" :aria-labelledby=\"$id('heading-do-renovation-loans-have-higher-interest-rates')\" x-show=\"expanded\" x-collapse=\"\" role=\"region\" style=\"height: 0; overflow: hidden; display: none;\">\n<p>\n            Interest rates for renovation loans vary significantly among different types of loans. Those that are secured (tied to a property for collateral) have lower rates than loans that are unsecured. A secured renovation loan is likely to have a lower interest rate than a home improvement loan, which is a type of unsecured loan. When compared to a typical mortgage, a renovation loan may have a higher interest rate. Remember, however, that interest rates are also affected by your personal finances, including your income and creditworthiness.\n        <\/p>\n<\/div>\n<\/li>\n<\/ul>\n<p><em>Additional reporting by Libby Wells<\/em><\/p>\n<div class=\"HelpfulCTA mx-auto flex flex-col items-center gap-6 my-6 py-12 text-base border-y border-gray-200\" data-helpful-cta=\"\" data-beam-element-viewed=\"\" id=\"did-you-find-this-helpful\" data-type=\"cta\" data-location=\"article-bottom\" data-position=\"banner\" data-text=\"Did you find this page helpful?\">\n<div class=\"HelpfulCTA-initial w-full flex flex-col items-center gap-4\" data-cta-initial=\"\">\n<div class=\"HelpfulCTA-question text-lg font-bold text-center text-gray-900\">\n            Did you find this page helpful?<\/p>\n<div id=\"H5aoRK5EGS\" class=\"hidden\">\n<div class=\"wysiwyg wysiwyg--sm wysiwyg--flush max-w-xs\">\n<p class=\"mb-6 text-base\">\n                            <strong class=\"block font-bold text-gray-900\">Why we ask for feedback<\/strong><br \/>\n                            Your feedback helps us improve our content and services. It takes less than a minute to<br \/>\n                            complete.\n                        <\/p>\n<p>Your responses are anonymous and will only be used for improving our website.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Help us improve our content<\/p>\n<div class=\"HelpfulCTA-actions flex gap-4 mt-2\">\n            <button type=\"button\" class=\"HelpfulCTA-btn HelpfulCTA-btn--yes border border-2 border-blue-600 text-blue-600 rounded px-6 py-2 transition font-semibold flex items-center gap-2 hover:bg-blue-50\" data-cta-yes=\"\" data-beam-element-clicked=\"\" id=\"did-you-find-this-helpful-yes\" data-type=\"button\" data-location=\"article-bottom\" data-position=\"banner\" data-text=\"Yes\" data-outcome=\"response submitted\"><br \/>\n                <span class=\"Icon\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Thumbs Up Icon<\/default:title><default:path d=\"M13.165 2.175c.322 0 .57.022.774.065.796.161 1.43.624 1.85 1.345.71 1.216.722 3.067.023 5.499h.516c2.28 0 3.422 0 4.337.548a3.844 3.844 0 0 1 1.721 2.25c.29 1.032 0 2.13-.592 4.336l-.516 1.926c-.312 1.151-.484 1.786-.882 2.324a3.368 3.368 0 0 1-1.442 1.098c-.625.247-1.28.248-2.475.248l-.021.01h-4.595c-.42 0-.636 0-.84-.032a4.19 4.19 0 0 1-.635-.15c-.204-.065-.387-.162-.763-.355l-1.69-.856c-.014.034-.026.069-.043.102a2.334 2.334 0 0 1-1.044 1.044c-.495.247-1.012.248-1.948.248h-.161c-.936 0-1.453 0-1.947-.248a2.333 2.333 0 0 1-1.044-1.044C1.5 20.038 1.5 19.52 1.5 18.585v-7.683c0-.936 0-1.452.248-1.947A2.387 2.387 0 0 1 2.792 7.91c.494-.248 1.01-.247 1.947-.247h.16c.937 0 1.454 0 1.95.247.353.177.653.44.875.763.64-.606 1.788-2.184 3.31-5.142.183-.366.312-.603.538-.819.193-.193.462-.355.72-.441.302-.097.539-.097.873-.097ZM4.739 9.288c-.624 0-1.076 0-1.227.076a.721.721 0 0 0-.323.322c-.075.15-.075.603-.075 1.216v7.683c0 .624 0 1.076.075 1.227.065.14.183.248.323.323.151.075.603.075 1.227.075h.16c.625 0 1.078 0 1.228-.075a.722.722 0 0 0 .323-.323c.075-.15.075-.603.075-1.227v-7.683c0-.624 0-1.065-.075-1.227a.672.672 0 0 0-.323-.322c-.15-.075-.603-.076-1.227-.076h-.161v.01ZM13.057 3.8c-.14 0-.226 0-.259.011-.032 0-.086.043-.107.064a2.98 2.98 0 0 0-.226.399c-2.187 4.272-3.53 5.647-4.33 6.092.003.162.004.34.004.536v7.82l2.217 1.122c.28.14.42.216.56.27.107.032.214.064.332.075.151.021.314.021.626.021h4.594c1.022 0 1.539 0 1.862-.129a1.84 1.84 0 0 0 .763-.58c.215-.28.355-.808.613-1.765l.517-1.927c.495-1.85.775-2.873.603-3.475a2.309 2.309 0 0 0-1-1.313c-.538-.323-1.594-.323-3.51-.323h-1.129c-.226 0-.473 0-.72-.15a1.087 1.087 0 0 1-.464-.614c-.075-.301 0-.528.076-.754.957-2.97.603-4.26.301-4.777-.183-.312-.44-.506-.774-.57-.14-.033-.377-.033-.549-.033Z\" class=\"icon-base\"\/><\/default:svg><\/span> <span class=\"text-base leading-4\">Yes<\/span><br \/>\n            <\/button><br \/>\n            <button type=\"button\" class=\"HelpfulCTA-btn HelpfulCTA-btn--no border-2 border-blue-600 text-blue-600 rounded px-6 py-2 transition font-semibold flex items-center gap-2 hover:bg-blue-50\" data-cta-no=\"\" data-beam-element-clicked=\"\" id=\"did-you-find-this-helpful-no\" data-type=\"button\" data-location=\"article-bottom\" data-position=\"banner\" data-text=\"No\" data-outcome=\"response submitted\"><br \/>\n                <span class=\"Icon\"><default:svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"Icon-glyph\" viewbox=\"0 0 24 24\" fill=\"currentColor\" focusable=\"false\"><default:title>Thumbs Down Icon<\/default:title><default:path d=\"M19.26 2.175c.936 0 1.454 0 1.949.247.452.226.818.592 1.044 1.043.247.495.248 1.012.248 1.948v7.678c0 .936 0 1.453-.248 1.948a2.333 2.333 0 0 1-1.044 1.042c-.495.248-1.013.248-1.95.248h-.16c-.937 0-1.454 0-1.95-.248a2.33 2.33 0 0 1-.885-.777c-.637.596-1.79 2.176-3.314 5.155-.183.365-.312.602-.538.828a1.924 1.924 0 0 1-.722.441c-.258.086-.484.097-.742.097l.022-.011a5.39 5.39 0 0 1-.905-.064 2.741 2.741 0 0 1-1.852-1.345c-.71-1.216-.721-3.066-.022-5.496h-.516c-2.283 0-3.424 0-4.34-.548a3.843 3.843 0 0 1-1.722-2.248c-.29-1.033 0-2.13.593-4.324l.517-1.925c.312-1.162.484-1.786.882-2.323.377-.495.872-.871 1.443-1.097.624-.248 1.281-.248 2.476-.248h4.597c.42 0 .635 0 .84.032.215.032.431.086.636.15.193.065.387.162.753.345l1.702.864c.017-.04.033-.082.053-.122a2.333 2.333 0 0 1 1.044-1.043c.496-.247 1.013-.247 1.95-.247h.16ZM7.503 3.798c-1.022 0-1.54 0-1.862.13-.302.118-.56.322-.765.58-.215.28-.345.775-.614 1.753l-.517 1.926c-.495 1.85-.775 2.871-.602 3.474a2.308 2.308 0 0 0 1 1.312c.539.323 1.594.322 3.51.322h1.142c.236 0 .473 0 .72.15.227.14.388.367.453.625.075.28 0 .516-.075.742-.959 2.969-.603 4.27-.301 4.775.183.312.44.506.774.57.162.033.41.033.572.033.128 0 .203 0 .236-.01.021 0 .085-.044.107-.065.032-.032.14-.237.227-.399 2.208-4.308 3.556-5.671 4.352-6.102a39.945 39.945 0 0 1-.003-.523v-7.79L13.63 4.175c-.28-.14-.41-.215-.56-.27a1.796 1.796 0 0 0-.344-.085c-.151-.022-.313-.01-.625-.022H7.503Zm11.596.001c-.625 0-1.077 0-1.228.076a.72.72 0 0 0-.323.322c-.075.15-.075.603-.075 1.226v7.68c0 .623 0 1.075.075 1.226.075.14.183.247.323.322.15.075.603.075 1.228.075h.16c.625 0 1.078 0 1.228-.075a.778.778 0 0 0 .324-.322c.075-.151.075-.603.075-1.227V5.423c0-.623 0-1.076-.075-1.226a.722.722 0 0 0-.324-.322c-.15-.076-.603-.076-1.227-.076h-.161Z\" class=\"icon-base\"\/><\/default:svg><\/span> <span class=\"text-base leading-4\">No<\/span><br \/>\n            <\/button>\n        <\/div>\n<\/p><\/div>\n<p>    <!-- Yes Form --><\/p>\n<p>    <!-- No Form --><\/p>\n<div class=\"HelpfulCTA-thankyou flex flex-col items-center gap-2\" data-cta-thankyou=\"\" style=\"display:none;\">\n<p>Thank you for your<br \/>\n            feedback!<\/p>\n<p>Your input helps us improve our<br \/>\n            content and services.<\/p>\n<\/p><\/div>\n<\/div><\/div>\n<p>Read the full article <a href=\"https:\/\/www.bankrate.com\/mortgages\/mortgages-pay-home-renovations\/\" target=\"_blank\" rel=\"noopener\" rel=\"nofollow\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key takeaways There are several ways to finance home renovations, including renovation mortgages, home equity loans and personal loans. Borrowing makes the most sense when repairs are urgent or when improvements will increase your home\u2019s value. Compare loan options carefully, considering interest rates, fees and the amount of home equity you have. Whether you\u2019re dreaming<\/p>\n","protected":false},"author":1,"featured_media":23101,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[58],"tags":[],"class_list":{"0":"post-23100","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-homes"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mortgages And Loans For Home Renovations | BudgetADirect<\/title>\n<meta name=\"description\" content=\"Key takeaways There are several ways to finance home renovations, including renovation mortgages, home equity loans and personal loans. 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