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Pennsylvania Home Improvement Loans                                                                                                                                           

Pennsylvania home improvement loans are flexible. Homeowners and buyers need a better way to finance improvements on their Pennsylvania home. In the past, homeowners or purchasers wishing to finance home improvement only had a few alternatives. These were 1) Pay for improvements in cash or with credit cards. 2) Do a cash-out refinance based on the current value of the home. 3) Take out  home equity loans. This still places the burden of funding the improvements on the homeowner who will not be reimbursed until after the loan closes.

I am a mortgage broker and represent 16 of the largest construction lenders in the market. As a broker, I work for my client and not the lender, taking the time to understand your situation and placing your loan with the lender whose programs most closely matches your situation and needs. I am able to give you unbiased advice and support throughout the process. Construction and renovation lending is a specialized part of mortgage banking and most lenders or brokers do not have the experience to guide you through this complex process. I have attempted to give you some basic information in this paper but please do not hesitate to call to discuss your individual project. At the most fundamental level, construction lenders offer two types of product characterized by how they base interest rates during the construction phase. I will refer to these approaches as “One Step” and “Two Step”

Home Improvement loans are a variation of the "One Time Close" construction/perm product. The major advantage of a home improvement loan is that we lend against the finished or "as completed" value of the property rather than the current value of your home as most other lenders do. With other programs, you are out of luck if you do not have enough equity to complete the project. 

The home improvement loan has two uses:

If you are purchasing a property that would be perfect if....... The first disbursement of your home remodeling loan acquires the property and subsequent disbursements occur at predetermined points in the construction process. After construction, the loan modifies into the permanent loan saving the cost of a second closing.

If you are remodeling your home because it would be perfect if.... The first disbursement of your home improvement loan refinances any liens against the property and advances the contractor any up front costs. Subsequent disbursements and modification follow the above process.

There are several programs designed for home improvement of Pennsylvania properties:

  • One Time Close Construction/Perm Single Rate. "One Step" program which protects you against increasing rates and extended lock fees. Interest only fixed rate during construction and modifies into a permanent loan after construction. Great flexibility and low rates on ARMs.

  • One Time Close Construction/Perm Prime Rate Based. "Two Step" program allows you to borrow up to 95% of your total cost for a Principal Residence and up to 90% on a Vacation Home. Based on the Prime Rate  during the construction period with interest only collected on funds disbursed. Allows a 12 month construction phase. 

  • FHA 203(k). The FHA 203(k) allows you to purchase or refinance existing housing and finance up to 110% of the costs needed to improve the home. The 203(k) is ideal for "fixer-uppers" or "handyman specials". 

  • No Documentation construction loans are now available! No Doc and Stated Income are wonderful for the self employed or anyone with difficult to document income or asset situations. NEW!

Under some of the above programs, you may act as your own General Contractor if the home remodeling costs are less than $50,000 and the "footprint" of the home is not changed. If your project is large or will change the foundation we will require a fixed price contract with a licensed contractor. Home improvement loans may require the use of a contractor. I have a section on contractor requirements and contracts.

 We  also offer Second Trust or Home Equity Line of Credit  for your principal or vacation home up to 100% of the Current Value of your Pennsylvania home.

For the documentation needed for your Remodeling Loan , a section on Frequently Asked Questions, a section on home improvement loan draw schedules, and information on home improvement loan fees  

NEW! A newsletter giving a detailed description of home improvement loans  by email.

Pennsylvania Home Improvement Loans Prequalify for your Pennsylvania Home Improvement Loans.

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Extensive consumer information on construction,remodeling, first time homebuyer,and no documentation mortgages.