Home Improvement Loans - Summit Mortgage

Are you considering a “diamond in the rough” property that doesn’t quite meet your needs, or do you already own one that’s no longer working for you? Summit Mortgage offers a variety of renovation and home improvement loans for both purchase and refinance transactions. These loans allow you to keep your savings intact while making the necessary or desired improvements to help the property better meet your housing needs.

Pros:

Qualifying is based on the post-completion value of the home or property
One-time close options lower closing costs

Cons:

Generally higher interest rates than market rates
Improvements must be completed by a licensed contractor, and the lender will handle the release of funds to pay the contractor

Best for:

People who love where they live but need more from their current home
People looking to purchase a home that doesn’t quite meet their needs in its present state

What are my home improvement loan mortgage options?

There are generally two types of loans available for home renovations or improvements, depending on your situation: a home improvement/renovation loan and a home equity line of credit or loan. Working with a Summit Mortgage loan officer will help you navigate the home remodeling loan options.

Discover home remodeling loans

Summit offers borrowers both conventional and government-backed renovation loan options. These loans can be used for purchasing a home or refinancing an existing home, with renovation costs included based on the home’s value after the work is completed.

Terms for home improvement/renovation loans

Federal Housing Authority (FHA) loan

10- to 30-year options, primary residence only. One to four-unit homes, manufactured homes, approved condos, and planned unit developments (PUDs) are eligible for financing. Minimum 580 credit score. The minimum repair cost is $5000, and work must be completed within six months. Loans are available for purchase or refinance.

Veteran Administration (VA) loan

10- to 30-year options, one or two-unit homes, primary residence only. 100% financing options with low rates. Must have VA home loan benefit eligibility. Loans are available for purchase or refinance.

United States Department of Agriculture (USDA) loan

30-year term only. Only available to purchase transactions for one-unit primary residences. Up to 100% financing. 580 minimum credit score. Income limitations and property location qualifications apply.

Conventional loan

15- and 30-year term options. Eligible properties include 1–4 unit primary residences, 1 unit second homes, approved condos, PUDS, multi-wide manufactured homes, and 1 unit investment properties. Minimum credit score 620. No repair cost minimum. Luxury improvements may be eligible. Loans are available for purchase or refinance.

Am I eligible for a home improvement loan?

Borrowers may qualify for home improvement loans with:

A credit score of 580 or higher
A down payment as low as 0% based on benefit eligibility and location requirements

Home Improvement Loan

Offer options for renovating your home to meet your needs.

0%

Possible min. down payment
580

Min. credit score
$0

No minimum dollar requirement for repairs

Check Rate

Is a home improvement loan right for my financial situation?

A Summit Mortgage loan officer will help you determine if today is the right day to start transforming your property into what you want and need it to be.

Schedule a free consultation

A local Summit Mortgage loan officer has the expertise to guide your decision-making process, answer questions, and get you approved for the best home improvement loan program for your unique situation. Find a loan officer who’s right for you.

Calculate your potential savings

Compare different home improvement loan programs with different down payments, rates, and terms to see which one makes the most financial sense for your budget. Calculate your mortgage payment with our calculator.

How do I apply for a home improvement loan?

Applying for a home improvement loan or determining if this type of loan is right for you is simple! Use our Quick Start Form to connect with a Summit Mortgage loan officer who can help guide you through the process.

Curious about what comes next? View our step-by-step application checklist to learn about the process and take your first step toward homeownership.

Get Started

Common home improvement loan questions

Is there a difference between “home improvement” and “home renovation” when it comes to loans?
No, in the mortgage industry, “home improvement” and “home renovation” are used interchangeably. The key difference is determining whether a home loan or a home equity loan is the best option for your needs. A Summit Loan Officer can guide you through the process to help you choose the right solution for your situation.

You can learn more about home renovation loans by reading the following blogs.
Can you refinance a home improvement loan?

Yes, if interest rates change in your favor, you can always refinance a home improvement loan. However, you’ll want to consult with your loan officer to calculate whether the rate drop is enough to cover closing costs and other fees.
Are home improvement loans hard to get?

No, the qualifications you’ll need to meet are similar to those of a standard non-renovation home loan. However, there will be additional requirements and paperwork related to the planned improvements and the contractor performing the work. These steps are in place to protect you as a homeowner.

Depending on the scope of the work, a United States Department of Housing and Urban Development (HUD) consultant may need to be involved. That would protect the borrower and the lender by ensuring the project is viable and has a reasonable estimated cost assigned to it.

Many loan products require a licensed contractor to lead the project. That often limits how much work non-licensed and insured contractors can contribute. Home improvement loans are generally not intended for do-it-yourself projects. If you plan to contribute to the improvements yourself, a home equity option may be a better fit.
Can you get a loan based on your home's after-renovation value?

Yes, the value used for qualifying is the projected value of the home post-renovation. An appraiser reviews and considers the renovation plans when determining the new value.

It is critical that the borrower has presented the full scope of what they want done to the home before closing on the improvement loan. Both the appraiser and lender must consider all items.
Do you have to know the full renovation plan before applying for a home improvement mortgage?

No, you don’t need to have full plans finalized before applying for a home improvement loan. However, it is important to note that the full scope of work will be required before the loan can close and work can begin.
Are home improvement loans tax deductible?

This is a question best addressed by your tax professional, as we are mortgage experts, not tax experts. State and federal tax laws determine deductibility, so the most reliable source of information is someone who specializes in this area.
Are there specific loans or benefits to help homebuyers with eco-friendly home improvements for sustainable renovations?

Yes, there are eco-friendly home improvement loans that allow for energy conservation features. Summit Mortgage offers many different kinds of home renovation loans. Each one has its own requirements for what type of improvements can be completed. When looking for specific types of loans, it’s always best to speak with a loan officer to determine which options are a good fit for your financial situation and project.

Is a home improvement loan right for you?

Home improvement loans for first-time homeowners, move-up buyers, or current homeowners for home improvement loans

Renovation loans have no restrictions on being a first-time homebuyer, move-up buyer, or current homeowner. Most programs have purchase and refinance options.

How do home renovation loans stack up to other mortgage types?

Generally, the interest rates are slightly higher than comparable non-renovation products. It’s important to note that these loans are designed for individuals looking to renovate their home with a contractor, with the costs of those improvements financed into their mortgage.

Schedule a free consultation with our mortgage experts

Summit Mortgage employs some of the most experienced loan officers in the country. Our in-depth knowledge of home improvement loans, combined with our commitment to understanding your goals, will ensure your homebuying experience is as smooth and rewarding as possible. Find a loan officer near you.

Next steps to find your home loan

Congratulations, you’re on your way to finding the loan that’s right for you. If you’re ready to get matched with a Summit Loan Officer to help you with the next steps, use our Quick Start Form.

If you’d like more information first, explore our online resources to learn about the key questions to ask your lender.

Stay in the know with mortgage and homebuying tips.

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