Did you know that there’s a VA loan specifically for home renovations? It’s true! With a VA Renovation Loan, you can use up to $35,000 to pay for home improvements. Also called a VA Rehab Loan, this an additional loan you would get at the time of purchase.
Wondering where that $35,000 amount comes from? The 35k is just about 25% of the total entitlement that veterans receive with a VA loan.
How does a VA Renovation Loan work?
A VA Renovation Loan is a second loan and is technically separate from your home loan. However, both loans will be lumped together so that you’ll have only one mortgage rate and one monthly mortgage payment.
How To Use a VA Renovation Loan
The goal of a VA Renovation Loan is to bring the home up to VA Home Loan standards. So while it won’t allow for a whole kitchen makeover, you can still do some major improvements.
You can use it to repair or replace the flooring. You can fix electrical systems, improve the plumbing, and even make some energy efficiency upgrades! However, if you’re looking to do a complete kitchen remodel, with new cabinets and maybe adding a center island with a granite countertop, you’ll need a different VA loan product for that.
Remodeling with a VA Cash-Out Refinance
With a VA Cash-Out Refinance, you can cash-out on your total equity. For example, if you have $33,000 in equity in your home, you can take out the entire $33,000. You could also choose to take out just a portion, say $20,000, to fund your kitchen remodel.
What’s more, if you plan it right, you could increase the value of your home with the remodel!
A VA Cash-Out isn’t limited to just home improvements either. You can use it for anything from buying a new car to taking a family vacation. Here’s another perk: you may be able to reduce your mortgage rate too!
Imagine being able to take out cash to remodel a bathroom, while increasing the value of your home, and still pay less per month on your mortgage! Of course, there’s no guarantee that all three of these perks will happen all at once, but with a VA Cash-Out Refinance, it’s not out of the question.
There are many more benefits awarded to current and retired military personnel, and their spouses through VA loans. Lower than average interest rates, zero downpayment options, and no mortgage insurance premiums are but a few. And when you combine it with a VA Renovation or Cash-Out Refinance, the advantages add up even more!
Not a veteran? Contact us to learn more about special loan programs for first-time homebuyers, less-than-perfect-credit homebuyers, and investors too!