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I found some interesting information on home renovation loans as I was searching around tonight. Now Wells Fargo is by no means the only, or the best, mortgage lender out there. I saw this page on their site and it really caught my eye. The idea is that you’re financed for the amount the home will be worth after the improvements. They go through a little list of the benefits of financing your home this way below Wells Fargo link.

In our case we’ve already purchased the home, and are looking to do all of our projects on a tight budget, as we get the funds. So this particular product isn’t for us, but if you’re looking to buy a home that needs renovation right away, consider a renovation loan like this one. If you have already have your home and have some equity built up in it, then you can take out a second mortgage against that equity and use that for home improvements. I would advise you to think this through before jumping in and splashing around your good credit and equity though. Be careful that what money you’re putting into the house you’ll be able to get back when you sell it. If you don’t plan to sell anytime soon, then be aware that second mortgages are often more expensive in terms of fees and overall interest rates. I hope this information is helpful for you.

This is the first in a series of posts I’ll be doing on different financing options for your home and/or home renovation. It’s important to be aware of all the opportunities and pitfalls out there regarding home financing. If anyone would like to help with this series and contribute their ideas, or an entire article, please let me know. Thank you!

Wells Fargo Home Mortgage - Renovation Loans
Renovation Loans
Whether the improvements you envision are large or small, necessary or optional, Wells Fargo Home Mortgage has a solution that lets you purchase or refinance a home and improve it - all in one loan! Our renovation loans benefit borrowers who:

* Have found a home they love that needs a little work
* Are current homeowners with little equity who want to remodel
* Are increasing the value of investment rental property

Benefits of Purchase & RenovateSM Loan and Refinance & RenovateSM Loan
More Money:
Your loan amount is based on the increased property value after renovation. Lower interest rate:
First mortgage rates are usually lower than second mortgage and credit card rates saving you money on renovation financing.
Lower monthly payments:
Financing your mortgage and renovation simultaneously spreads improvement costs throughout the term of your loan. More tax deductible interest: *
The interest on your renovation costs are part of your first mortgage.
No wait:
You can begin your renovation immediately after closing. Simplicity:
There’s only one application, one set of fees and one monthly payment.

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