How to Finance: Remodels, Fixer Uppers, and Accessory Dwellings
We interviewed Kris Floyd of Pinnacle Capital to try to get to the bottom of the timeline for financing a home improvement project, addition, remodel or accessory dwelling.
Kris explained that when done right, the renovation loan process will take 30 days and there are five steps in this process:
Pre qualification (1 day)
If buying a new home the offer to purchase the home must be accepted. If renovating our own home or adding on, this is obviously not relevant (1 day)
List of repairs to be approved and choosing a contractor (10 days)
Loan approval, appraisal, final conditions for the borrower and renovation (11 days)
Closing (7 days)
The renovation that follows can range from 30 days to over six months.
Kris at Pinnacle Renovation Lending spends over 80% of this time working with owners to obtain renovation loans. At New Avenue we are working with them to help owners who are considering 203K loans and remodeling loans. They have the ability to finance the soft costs, which include the design and permit fees. You will typically pay these soft costs out of pocket and then be reimbursed once construction begins.
Kris estimates that over 95% of all their renovation loans take from 30 to 45 days to close.
Pinnacle has a renovation loan that allows owners to purchase a home and renovate the home with one loan. There are two key benefits in their renovation loan that we find unique. First, t he mortgage is based on after-improved value. Second, there is only one closing and then repairs begin.
To learn more about remodeling costs, to speak to a designer or contractor or to discuss the financing options you can sign up at New Avenue.
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