If given the choice between a turnkey home or a fixer-upper, I’ll take the fixer-upper every time! I do understand, however, that not everyone is married to a contractor, and a big renovation can feel daunting. There’s also the question of how to pay for it! This is the situation Justin Goldman found himself in not long after he and his wife purchased their home in Devon. While they desperately needed more space to accommodate their growing family (moving wasn’t an option; they loved their neighborhood and school district!), they hadn’t lived in their home long enough to build up enough equity to finance a large renovation. They briefly considered a construction loan but were told they would have to refinance their low-rate mortgage.
Justin was convinced there had to be a better way, so he co-founded RenoFi, an online platform that facilitates renovation loans for new homeowners who are light on equity. Unlike traditional loans, RenoFi loans factor in what your home will be worth post-renovation.
Last Thursday, I chatted with Justin on IG Live about his company and various loan options (you can view the entire chat here). In the meantime, here’s a quick rundown on RenoFi:
• RenoFi loans are specifically designed for new and soon-to-be homeowners who are “equity light,” meaning they’re unable to borrow enough money to finance a renovation via a traditional home equity loan.
• Unlike a home equity loan or home equity line of credit (HELOC) which only take into account the current value of your home, RenoFi loans allow you to borrow against your home’s future (post-renovation) value. You can borrow up to 90% of your future home value with a RenoFi renovation loan.
• Before your loan is approved, RenoFi arranges an “as-completed” appraisal, which is based on the renovation plan you submit and neighborhood comps.
• Most RenoFi loans are between $100,000 to $300,000, but homeowners can borrow up to $500,000. The minimum loan amount is $20,000.
• RenoFi loans can be used for outdoor spaces too, such as pools and patios.
• Most homeowners can apply as soon as they close on their home.
• If you’re considering purchasing a home that will require a renovation, you can use RenoFi’s online loan calculator to develop a preliminary budget.
• Once your renovation is finished, RenoFi facilitates an inspection to confirm the renovation was completed as planned.
Thanks so much Justin for giving me the lowdown on RenoFi! Click here to learn more about the company and the various loan options available.