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Today's news - Renovation Financing should be in your toolbox. Here's why... From the Joint Center for Housing Studies at Harvard - Accelerating growth in residential improvement and repair expenditures is anticipated through the third quarter of 2018, according to the Leading Indicator of Remodeling Activity (LIRA). Home renovation and repair spending will increase from 6.3 percent in the fourth quarter of 2017 to 7.7 percent by the third quarter of next year. Recent strengthening of the US economy, tight for-sale housing inventories, and healthy home equity gains are all working to boost home improvement activity. “Over the coming year, owners are projected to spend in excess of $330 billion on home upgrades and replacements, as well as routine maintenance.” For more info check out the full report - http://www.jchs.harvard.edu/growing-momentum-expected-remodeling-spending

What you need to have in your toolbox... You can get more business, and be the hero by simply handing a potential client information with all their financing options. If you would like such a flyer, please contact me. Here are the many ways your customers can pay for home improvement, renovation and additions - Renovation Mortgage or Renovation to Perm - This type of financing has one significant advantage...it is based on the future value of the home and is likely tax deductible depending on IRS rules at the time. Cash (including retirement funds) - This is great, but if it is coming from a high yield fund or retirement account, then your customer might want to consult with their financial adviser before liquidating such an asset. HELOC/2nd Mortgage - This vehicle can work nicely, if there is enough current equity to cover the project costs. Under new tax laws, this type of financing may no longer be tax deductible. Also HELOC's typically have variables rates. Cashout Refinancing - Much like a HELOC, in that this is based on current value, NOT future value. If there is enough equity, then this is excellent, and is still likely tax deductible. Custom Renovation Financing (from companies that specialize stand alone loans for this purpose) - Can work if a relatively small project. Rates are higher. Not tax deductible. Look at final payment compared to above options.  Personal Loan - This works, but is limited as most banks cap these loans at around $10,000. Rates are higher, and not tax deductible. Best for small projects, especially if customer can pay down rapidly. Credit Cards - Much like personal loans, these are not tax deductible, typically have much higher interest rates. Loan amounts are limited. Not a good option unless customer has ability to rapidly pay down the balance.

2 Hour CE Credit Class "Renovation Financing"

When: Thursday November 30th, 11am –1:30
Where: Stony Point Conference room (1 St. Floor)
9020 Stony Point Parkway, Richmond, VA 23235
Cost: $15 payable to RAR, or cash.

LUNCH INCLUDED

Brought to you by Prime Lending and sponsored by RAR, this DPOR approved CE class includes acquisition, tax credits and abatement, mortgage qualifying guidelines and programs, energy efficiency financing, market analysis, and much more!

Learn all you need to know to help your buyers and sellers use renovation financing to make and save more deals.  Longest running CE class on Renovation in Virginia.  

“The worse the house the better”.

Realtors: On a more serious note, prep your buyers and consider renovations!

I hope you have success this weekend while showcasing listings and/or showing buyers homes.  If you are doing neither, it likely means that someone is covering for you, so you can have some leisure time.  Please enjoy it.  Either way, here is some information you will find helpful…

Though most of my borrowers are owner occupants and the occasional 2ndhome borrower, the 5 to 10% of investor loans I do typically fit a very specific list of parameters.  There is a list below, but to make it easier, here are basic investor guidelines for secondary mortgage lenders (that is most of us). 

-      Must have a credit score above 720 (we will go to 620).

-      Must have no more than 3 mortgaged properties.

-      Should be able to put at least 15% down of acquisition.

-      Should have 3 to 6 months PITI reserves for every other investment property they currently own.

The rest of the rules are pretty much similar as most other conventional guidelines. 

You should send your renovation buyers, regular non-cash buyers (and maybe those too) to me because…

Experience – As you know, experience is powerful.  When you and your customers run into tricky scenarios, loan problems, or unique properties, experience is the one thing that trumps all else.  Closing loans since 1988, over 2,200 closed mortgages (60% of those being renovation), and 3 renovation loans personally, it is more likely than not that I will have a solution to your transactional challenges, and especially make the easy ones extremely smooth.   I created the first CE Class on renovation lending in 1993, and still teach that to realtors today that want to increase enhance their toolbox or resources to help clients. 

Products – When it comes to RENOVATION LENDING, no one has more products than we do at PrimeLending.  We have products for…

Owner Occupants - FHA 203K  /  HomeStyle  /  VA Renovation  /  EZ-C  / Jumbo Renovation  /  Reno/Perm  Escrow Repair

Investors - HomeStyle  /  EZ-C  /  Escrow Repair

2nd Home Borrowers – HomeStyle  /  EZ-C  /  Reno/Perm  /  Escrow Repair

Complete list of reno products below…

Process –Once a loan is applied for, our processing and underwriting teams offer world class service with manual and automated communication systems in place to keep you informed throughout the loan process.  Additionally, I am available by phone 7 days a week to answer important questions to keep transactions moving forward.  Since we follow automated underwriting guidelines we have fewer approval conditions than most lenders.  Being a direst lender is always preferable, and we are.  For the tech savvy clients, borrowers can apply for loans and get loan status through all available E channels.  For non-tech users, we can also do loans manually.  Paper and pen still work!    

Service - All introductions start with a LOAN CONSULTATION to map out and understand exactly what the borrower wants, qualifies for, and what products are the best fit.  My renovation website www.rdayhouseperfect.com is a valuable resource for you and your buyers, to get qestions answered 24/7.  Once a loan closes, our draw department managers the draw process faster, smoother and with less hassle than any other lender!  This is important to you as an agent, because that last thing you want happening after a loan closes is to hear from your buyer about how they can’t get their contractor paid.

The Renovation Loan Rundown