Thursday, February 21, 2019
Congratulations! You found a house in your price range and are imagining all the ways you could renovate it to feel like your own, the perfect home that matches your needs, lifestyle and decorating sense. The only problem? The down payment and closing costs eat into the money you could be using to fix up your new home.
Good news: Montgomery Bank has created a new renovation mortgage to help borrowers with this issue. The Montgomery Bank Renovation Mortgage is a single-close loan that enables borrowers to purchase a home and finance renovations at the same time. It can also be used to refinance an existing home mortgage and include funds needed for renovation in the new mortgage balance. There is no minimum loan amount or private mortgage insurance (PMI) required.
“We put this plan together because Chip and Joanna and HGTV have shown people what they can do with their home,” says Monica Waldon, mortgage loan officer. “But the majority of people don’t have the funds to renovate or make those improvements. They may have enough for a down payment to purchase their home, but not enough for the renovations.”
The loan can be applied to all renovation costs, architect fees, city licenses and building permits. The money is put into a Montgomery Bank checking account so the bank and the title company involved can monitor how the funds are spent. If there are extra funds at the end of the project, the money can be given back to the borrower, or the remaining balance can be applied to the mortgage as a principal reduction.
The process for taking out a Montgomery Bank Renovation Mortgage goes like this: once the customer has a sales contract, they can find the contractor they want to work with. The customer should bring the contractor’s renovation estimates with them to Montgomery Bank so an appraisal can be ordered. The home is appraised based on what it is currently worth as well as what it will be worth after renovations, which is the amount that is loaned against.
Within two weeks of the appraisal being ordered, Montgomery Bank can know how much the bank can loan; the mortgage can be closed within 30 days once the client’s information and the appraisal is received.
The idea behind creating this loan, says mortgage lender Tina McRaven, is to offer a unique product for our customers that can help them attain their dream home. And also, Waldon says, to stimulate the housing market, especially for homes that might have a hard time selling because of the amount of work they need.
“If somebody finds a home that they like, this allows them to turn that home into one that they love because they can fix it up,” Waldon says.
Montgomery Bank hopes this Renovation Mortgage serves you well. For more information, visit montgomerybank.mortgagewebcenter.com/ or call Monica Waldon at (573) 986-5525 or Tina McRaven at (573) 331-8507. Subject to credit approval. Montgomery Bank NMLS# 793181. Equal Housing Lender.