Renovation Loans
Step-By-Step
With a Renovation Loan from Draper and Kramer Mortgage Corp., you get a loan for the purchase price of the house plus the expected costs of the renovation - all in one package. Purchase or refinance a home and make the upgrades you want and take up to 6 months to complete the project. Renovation Loans are one of the more complicated mortgage programs available, so while this step-by-step guide is here to help give you an overview of the process, it is important to work with a your loan officer from start to finish to ensure a smooth process.
STEP ONE
Contractor Selection
- Determine the cost to complete your project
- Determine which permits are required for your project
- Get quotes from a reputable, licensed and insured residential contractor
STEP TWO
Loan Application
- Determine your financing options with your Loan Officer
- Read and sign each loan document and submit the necessary personal information and documentation needed to move forward
STEP THREE
Loan Processing
- The loan processor will put together your entire loan package so that it may be underwritten
- The processor reviews your credit report and verifies your debts, payment histories and employment status
- The contractor on the project will then need to submit a proposal that covers the scope of repairs or renovations to the property
- Finally, an appraisal will also be conducted with the scope of the renovation work to be done included
STEP FOUR
Underwriting
- The Underwriter reviews your application, documentation, financial information, sales contract, contractors documents and proposal, appraisal, and title
- The Underwriter will then make the credit decision whether to approve the loan
STEP FIVE
Loan Closing
- At closing you will sign all the final documents and the loan will be funded
- Typically your first mortgage payment will not be due until the second month after your closing date
STEP SIX
Renovation Begins
- Within 30 days of closing you will receive a welcome kit from your Draw Administrator
- The project must begin within 30 days of closing and must be completed within 6 months
STEP SEVEN
Obtaining a Draw
- Prior to the first draw you must have any required building permits in place and when a stage of the plan is complete you will call to request a draw
- Your Draw Administrator will require an inspection to be performed and upon a clean report a check will be written jointly to you and your contractor
STEP EIGHT
Project Completion
- The draw process may be repeated until the process is complete
- A final inspection and title update will be obtained by the Draw Administrator
- A Certificate of Occupancy/final municipal inspection is required for any permits previously issued