Friday, 15 January 2021

Best Mortgage Lenders for Home Improvement Loans of 2018

When you need to make improvements on a house, there’s more than one way to pay for it. Whether you own the house already or you’re buying a fixer-upper, and whether you’re building an addition or you’re merely renovating a bathroom, you have plenty of options for financing the work if you’re not paying for it out of savings.

NerdWallet researched dozens of prominent mortgage lenders to identify which are among the leaders in five categories of lending for home improvement projects. Happy hammering!

Best HELOC lenders

A home equity line of credit, or HELOC, acts somewhat like a credit card, using your home as collateral. HELOCs have variable rates, and you tap your equity only when you need it.

suntrust mortgage
  • Convert all or part of the HELOC into a fixed-rate option.
  • Maximum loan-to-value 89.9%.
  • Discount introductory interest rate on initial advances of at least $25,000.
  • SunTrust review.
  • Line amounts from $10,000 to $1 million.
  • Rate discounts for certain customers who withdraw at least $25,000 at closing.
  • Multiple draw methods.
  • Flagstar Bank mortgage review.

» MORE: Best HELOC lenders

Best cash-out refinance lenders

If you have plenty of equity in your home, you can pay for home improvements by refinancing your mortgage for more than you currently owe. You collect the difference in cash; that’s why this form of refinancing is called a cash-out refi. The cash can be used to pay for the renovations.

Rocket Mortgage
  • Gives a cash-out refi decision in minutes.
  • Online application automatically imports much of the data needed.
  • Mortgage bankers are available for assistance.
  • Rocket Mortgage review.
  • Offers cash-out refinancing for veterans and service members who have VA home loans.
  • Client advocate team is staffed by former senior enlisted leaders in the armed forces.
  • Borrowers with non-VA loans may use the cash-out refi option to refinance into the VA program.
  • Veterans United review.

» MORE: Best cash-out refinance lenders

Best Fannie Mae HomeStyle lenders

A HomeStyle mortgage allows home buyers and refinancers to roll the costs of renovations into the loan. Qualified first-time home buyers can buy with down payments as low as 3%.

  • Available for purchases and refinances.
  • Get a HomeStyle loan with a down payment as low as 5%.
  • Lender recommends HomeStyle to fix up older homes in established neighborhoods.
  • PrimeLending review.
  • Combine purchase or refinance with renovation costs.
  • Serves all 50 states and the U.S. Virgin Islands.
  • Lender claims expertise in renovation loans.
  • Flagstar Bank mortgage review.

 Best FHA 203(k) lenders

The Federal Housing Administration’s 203(k) program lets borrowers include renovation costs in an FHA-insured mortgage. The loan amount takes into account the home’s current value, its future value after renovations are completed, and how much the work will cost.

  • Says it’s the nation’s top originator of FHA 203(k) renovation loans.
  • Originates both types of 203(k) loans: Those for minor upgrades for up to $35,000, and those for structural repairs that require a consultant.
  • Renovation mortgage originators provide personalized service.
  • Homebridge Financial Services review.
  • Purchase or refinance with an FHA 203(k) loan.
  • Both types of 203(k) loans are available: streamlined (for minor repairs and upgrades) and standard (for structural repairs requiring a consultant).
  • English/Spanish bilingual agents are available.
  • New American Funding mortgage review.

» MORE: How a 203(k) loan works

Best unsecured personal loan lenders

Unsecured personal loans are not backed by collateral such as one’s home. The interest rates are higher, but borrowers don’t put their homes at risk. These prominent mortgage lenders also offer personal loans to pay for home improvements.

  • Personal loans up to $35,000 to remodel or improve the home.
  • Apply online or on the phone.
  • Once approved, loan funds typically are disbursed in two or three business days.
  • LoanDepot review.
suntrust mortgage
  • SunTrust’s LightStream online lending division offers an unsecured loan that is used to pay for home improvements.
  • Fixed-rate loans from $5,000 to $100,000.
  • Complete process, from application to funding, is online.
  • SunTrust review.

» MORE: Shop personal loans for home improvements

Best home improvement mortgage lenders: Summary

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