Buying a home with VA home loans is one of the best ways to save money and get into the home of your dreams, but that’s not all that VA loans are good for. You can also use them to finance home improvement projects to upgrade the house you already live in. The process is slightly different than applying for a standard VA loan, but as long as you know which options you have available, you’ll be able to find the right loan for your needs. Here are a few of the best options to choose from.
VA Renovation Loans
Not all homes you look at when searching for a property will satisfy the VA’s property requirements for financing right off the bat. They’ll need a little TLC to bring them up to standard. VA home loans allow you to roll the cost of the renovations into your mortgage right from the beginning. Keep in mind that the more you borrow, the higher your monthly payments will be. If you’re using this type of loan to upgrade a house you don’t already own, make sure you can afford the full payments before you accept the money.
VA Cash-Out Refinance Loans
A cash-out refinance loan allows you to borrow against the equity you’ve built in a home. You’re free to use the cash you receive to fund your upgrades and home renovations as needed while also being able to refinance existing VA home loans to a lower interest rate or more favorable loan term.
Keep in mind that you’ll only be able to qualify for a cash-out refinance loan if you’ve paid your mortgage down. You need to owe the lender less than the full value of your property to be able to borrow against the equity you’ve built up.
VA Supplemental Loans/Second Mortgages
The VA allows you to take out a VA-backed supplemental loan provided you financed the home with a VA loan originally. This loan can be used to finance any type of home improvement or upgrade you want to make and can be rolled into your existing mortgage or financed as a second mortgage. Regardless of the option you choose, you’ll want to be mindful of how much the new loan will increase your monthly mortgage payments.
Discuss Your Options
If you’re looking to make home improvements with VA home loans, don’t navigate the application process on your own. Contact our team to discuss your options today.
