A guide to using mortgages and loans to pay for home renovations - WUSA9.com

There are various types of home renovation loans available for those who don't have the cash to pay for home repairs. An FHA 203(k) may be best for those with mediocre credit and not much money to put down. HomeStyle loans from Fannie Mae have higher credit requirements and give the borrower a bit less freedom for using the funds. Regardless of the type of loan, borrowers should be wary of renovations where costs exceed the increase in home value.

Key Takeaways:

Your credit and eligibility can greatly affect the type of loan or mortgage you can obtain.
Remodeling can be an expensive process, but can often increase the value of the home beyond the cost.
Remodelers should beware of projects that cost more to complete, than the value they give.

“If you’re considering a home remodeling project, you’re probably thinking about borrowing money, as this work can be quite costly.”