Need Room For the Youngest and Oldest? Add An Additional or Accessory Dwelling Unit With A Home Renovation Loan To Fit Your Youth and Senior Needs

Have you heard about ADUs? You may know them by another name, like “extra room” or “granny flat.” ADU stands for “accessory dwelling unit.” When you add another room to your primary residence, or add a separate structure on your property, each of these home additions qualifies as an ADU. 

Can an ADU boost your home’s value?

In many cases, yes, adding an accessory dwelling unit could increase your property’s value. Not every home improvement project increases your home’s resale value. For example, studies by the National Association of Realtors (NAR) indicate that projects like luxury bathrooms or specialized kitchens don’t add much, if anything, to a home’s value when it comes time to sell. For example, glamorous bathroom amenities like whirlpools and walk-in waterfall showers, only return about half of what they cost when your home is sold.

If you add an ADU, either as part of your primary residence or elsewhere on your property, it could add significant resale value to your home. One study from Oregon showed that homes with ADUs gained up to 51% on average in resale value. 

What are uses for ADUs on your property?

With changing families these days, sometimes ADUs are more than just “granny flats.” You may have younger family members who will continue to live at home while they attend school and work. You may have older extended family members who you want to continue to share your home. 

Other uses for ADUs include rental properties, or as a location for live-in caregivers for elderly or disabled family members.

How can you pay for an ADU?

You can get a home equity loan (HEL) or a home equity line of credit (HELOC) to pay to add a room or structure to your property to accommodate additional family members. Other options to pay for the ADU include a cash out refinance of your existing home loan. You may even be able to add an ADU that you could rent for additional income — but don’t count on future rental income from a unit that isn’t completed to qualify for financing. Work with an experienced independent mortgage broker and home loan professional at California Platinum Loans, who can guide you through the process of financing your ADU and making a real change to your property to benefit younger or older family members.

Sources

https://maxablespace.com/how-to-finance-a-granny-flat/

https://www.moneycrashers.com/worst-home-improvement-projects-decrease-resale-value/

https://www.marrokal.com/how-an-adu-can-add-convenience-income-and-resale-value-to-your-home/

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Hurry Now! Start Restoring Your House That Has Seen Better Days Through FHA. You Can Also Opt For Loan Products By Freddie Mac Or Fannie Mae

Did you know there are California home loans that will help you not just to buy a home, but also pay for renovations? If you’re considering buying a house that needs some work, sometimes called a “fixer-upper,” or a “handy-mans special”, or a property that needs “TLC” aka “Tender Loving Care”, you do have options to pay for the work that it will need. 

What type of home renovation loans are there?

The best-known type of home renovation loan is the FHA 203(k) loan. This loan comes in two versions: limited and standard. The limited FHA 203(k) loan will pay for up to $35,000 in renovations, as long as they’re not considered to be luxuries by the Federal Housing Administration (FHA). A new bathroom isn’t a luxury, but a new swimming pool would be, according to FHA guidelines. 

The standard FHA 203(k) loan will pay for renovations over $35,000. In order to qualify for this loan, you will need to work with a HUD-certified consultant who will get bids and oversee inspections of the work. Both of the FHA 203(k) loans will pay for renovations on your primary residence. They aren’t available for second homes or investment properties.

Other home renovation loans include FannieMae’s HomeStyle loan, and Freddie Mac’s CHOICE Renovation loan. These loans require higher credit scores than an FHA 203(k) loan. You could potentially qualify for an FHA 203(k) loan with a credit score as low as 500 to 520, but you will need to make a down payment of at least 10%.

Don’t let a “fixer-upper” stop you from buying the home you want

If you find a home that you can afford in the neighborhood you want, but it needs upgrading or repairs, don’t pass it by until you’ve considered a home renovation loan like an FHA 203(k) loan. There are many California home mortgages which can pay for the purchase and renovations that can help you to move into the neighborhood you want to live in, and have a modernized live-able and enjoyable home with the upgrades/renovations and repairs, you want and need. These loans allow you to finance 100% of the renovation rehab costs.  All those costs are rolled into the loan.  You just pay your normal down payment on the purchase, the rest of the costs including renovation, permits, and holding costs during the renovation period are often times covered by the loan. So you start making payments when your home is move in ready. Contact Us here at California Platinum Loans to see how we can make your dreams of buying a fixer upper with a low down payment a reality today!

Sources

https://www.moneycrashers.com/fha-203k-mortgage-loan-requirements/

https://www.nerdwallet.com/blog/mortgages/renovation-loans-expand-homebuying-options/

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