Darin and Christina Cunningham | Re/Max Elite
278 Franklin Road Suite 190 | Brentwood, TN 37027
Office: 615.661.4400 | Fax: 615.661.4115
Christina: 615.394.4168 | Darin: 615.456.4086

How Can You Use a Jumbo Renovation Loan?

Jumbo Renovation Loan

You have found a home in the perfect neighborhood—amazing location, top-notch schools, and close to your job. The only problem is: the house needs work. You have decided you are willing to renovate, but need to ensure you have enough funds to cover the costs. Affluent homebuyers who do not want to be limited to the confines of a conventional rehab loan can now opt for a jumbo renovation loan. This type of private loan gives homebuyers the money needed to renovate their house and wrap the loan into their existing mortgage.

When you take out a jumbo renovation loan, the lender handles the funds and disburses them as needed prior to closing. Some of the benefits of taking out a jumbo renovation loan when you purchase a house is that you’ll have one mortgage balance, one interest rate, and one round of closing costs.  Then you are left with a larger mortgage payment and your dream home.

You can also take out a jumbo renovation loan and refinance your existing home, though then you will need to pay closing costs again.

What renovations can I make?

Jumbo renovation loans are only to be used for cosmetic upgrades and repairs. You can use a jumbo loan for:

  • Kitchens
  • Bathrooms
  • Swimming pools
  • Outdoor living spaces
  • Finishing a basement or attic
  • Hardscaping
  • Repairs required by an appraiser or the borrower

Go ahead and use the funds to build your dream kitchen, renovate the entire backyard, or redo all the home’s bathrooms. Jumbo loans are ideal for homes that are in need of major cosmetic upgrades.

What are the limitations of a jumbo loan?

There are a few caveats to be aware of:

  • Your renovations must add additional value to the home
  • Your renovations must be permanently affixed to the home
  • Your loan cannot be used to address structural issues
  • You cannot use a jumbo loan to add an addition that increases the footprint of the home
  • Your lender can deny a loan if it won’t be used for approved purposes

Please note that if you take out a jumbo rehab loan, you cannot do the work yourself, nor can anyone you know on a personal level. It cannot be a friend, family member, your realtor, or any person with a personal interest in the home. The contractor must be licensed and insured, have no criminal record, and be approved by your lender.

Renovate the perfect home in Nashville with our help

Do you dream of moving to the greater Nashville area?  Darrin and Christina Cunningham are the premier real estate agents in all Nashville neighborhoods, including Belle Meade, Mount Juliet, Brentwood, and more. We can help you purchase a distressed home in need of rehab and obtain a jumbo renovation loan. Call our office today at 615.661.4400.

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