“Leadership is about finding your unique blueprint and expressing that courageously, confidently, and vulnerably.”
So how do you really find that blueprint in a world full of extreme competition among professional diversity? It’s simple. You look for ways that make earning and attaining financial closure easier and accessible for you. One specific way is to start a business using a loan. But is it really an ideal way for people looking to create a unique blueprint for themselves? Does everyone who has wandered and explored have the tendency to turn loan money into a thriving enterprise that continues to grow? I believe not! In fact, for veterans and service members, looking for lasting, strong, and reliable income solutions can be a struggle if you are not willing to learn what is a VA renovation loan and make good use of it.
Yes, you heard it right. With the vast amount of loans out there, there is always something unique and different in terms of loan finances that may be the answer to all your problems. And here, if you are planning to ride on a different and secure endeavor of margin profits, choosing a VA renovation loan to purchase a fixer-upper can be an ideal way to move forward smoothly.
Why is that? Well, if you are eligible for this loan, you can use it to buy and renovate a home without putting any money down from your side. Not just that, but this tactic is also beneficial with a greater interest rate. Now isn’t that smart? But wait! If you’re new to exploring what a VA renovation loan is, then you may need in-depth insight to set foot on the right track. To help you gain that insight and understand why finding a VA rehab loan lender can be challenging, let’s go ahead and explore more about this type of loan.
But before we do that, here’s a detailed video that will help you attain more knowledge and understanding of the VA renovation loan before you end up applying for one!
So, What is a VA Renovation Loan Exactly?
Speaking of this type of loan, you may be wondering whether it is ideal for you to apply for one or not. Since the VA renovation loan program allows you to buy a house that needs repairs and any kind of fixing, it can be an easily approachable loan. It serves as a single mortgage loan that is remarkably similar to all the other VA mortgages. The VA renovation loan or rehab loan lets you attain a loan with extra-low interest rates. Not just that, but this loan also offers you the convenience to buy a home with zero down payment, making the home buying and loan processing process less struggling and time taking.
Now it may seem like this is more of a home purchase loan, but it’s not. This loan is accessible by current homeowners that need to refinance their property and plan to repair it for future sale plans. The only factor that limits individuals from having this loan is them being non-veteran. It means that the primary requirement of this loan for the owner or his/her spouse is to a veteran or an active-duty service member in any sector.
Here are four factors that fall in your favor when opting for a VA home renovation loan include:
- You don’t have to choose homes and buy ones that are already meeting the VA’s minimum property requirements. Instead, you can simply use the loan money to improvise the home’s look and make it meet the VA’s standard requirements after renovation.
- This loan is also preferable if you already own a home that simply lacks TLC. The only limitation here while applying for a loan being a homeowner already includes a limited loan amount that is based on the value of your current home. So, the amount you get can’t exceed more than this value if you’re applying in accordance with a home you already own.
- In case you opt for a VA renovation cash-out refinance here, then it can be possible for you to attain a maximized loan amount that meets the expected value of the home you have renovated or plan to repair – while the amount is calculated after the repairing is completed.
- While you do get great ease and convenience through this loan, it’s essential to understand the usage requirements of a VA renovation loan, especially when it comes to the lenders and their construction fees. Usually, these lenders charge up to 1-2% of the loan amount. Hence, choosing the right lender when applying for this loan is also very crucial.
More About VA Renovation Loans:
One thing that should be considered while using the loan amount you get is to keep the total financed amount below the home’s total expected value after the renovation is completed. While we have mentioned that there are no loan amount limits when applying for this type of loan, it’s essential to stay within the budget instead of going out of the way with your payments during the repair and renovation process.
In this way, it can be easier to ensure that the value assigned by the appraiser as per the future home value for your loan is enough to meet all your renovation demands instead of going out of the line.
Basic Requirements of Applying for a VA Renovation Loan:
Now there are specific eligibility requirements that need to be met at the beginning of thinking about applying for this loan, such as the ones mentioned earlier. However, it’s beneficial to continue the process of exploring a VA renovation loan through the application processing requirements once you pass the basic eligibility requirements. These requirements include:
- The owner or loan appliers intend to consider the home as his/her primary residence.
- The renovations should not just focus on improving the interior or outlook of the home, but rather on the more substantial and base repairs and renovations. This can include improvement in the utility and safety of the home, which will support improving the value of the home.
- Choosing a contractor that has a valid VA builder ID.
- All improvements started and completed within 120 days of the loan closing
- Assurance that all the home improvements meet the VA requirements, especially during the additional inspection that takes place after the closing of the loan.
Benefits of a VA Renovation Loan:
Understanding the criteria of applying for a loan is one thing, but knowing why it is of utmost benefit for you is also crucial. Besides, with so many types of loans out there, there should be a substantial reason why this particular loan is the ideal solution to all your financing problems, right?
Speaking of which, now that we’re exploring what a VA renovation loan is, let’s explore some of its benefits too.
- In contrast to a traditional VA home loan that only finances the purchase of general refining of a home, the VA renovation loan occupied broader applicability in terms of home improvement.
- A portion of this loan is simply directed towards the renovating of the property with quality services and results.
- These loans can also be sued for refinancing purposes and/or a supplemental loan. Either way, it serves in financing the repairing tasks of your property while also playing the role of traditional VA financing.
- This loan can be applied and attained without having to invest any down payment or have any mortgage insurance. It also offers a very low-interest rate to eligible applicants.
- With this loan being a single VA loan, the borrower can attain one convenient monthly payment that can easier to plan and budget for the borrower. As a result, it is easier to pay back the interest of this loan, whether you are someone who can afford hefty interest rates or not.
- This loan is better and easier to pay back as compared to the purchase mortgage loan or the particular rehab loan.
With these and plenty of other benefits of having a VA renovation loan, it’s certainly an excellent financial decision for a veteran or an active duty service member.
Now that you know precisely what a VA renovation loan is, are you planning to apply for one? One of the riskiest decisions to make when applying for any loan is to find an ideal lender. Hence, once you have thoroughly explored the role of a VA renovation loan and whether you fall into its eligibility requirements or not, the challenge hasn’t ended yet. In fact, it’s time to smartly continue the further process, from choosing a reliable vendor to handling the paperwork and home repairing tasks as per the loan requirements. Yet, the good thing about this loan is that it doesn’t occupies prolonged time or any advanced legal eligibility for you to successfully get the loan amount and use it for improvising your home.
So as long as you’re focused and aware of what this loan is, you’re ready to go. Good Luck!