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Best Mortgage Lenders for Home Improvement Loans of 2018

Aug. 29, 2018
Finding the Right Mortgage, Mortgages
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We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

When you need to make improvements on a house, there’s more than one way to pay for it. Whether you own the house already or you’re buying a fixer-upper, and whether you’re building an addition or you’re merely renovating a bathroom, you have plenty of options for financing the work if you’re not paying for it out of savings.

NerdWallet researched dozens of prominent mortgage lenders to identify which are among the leaders in five categories of lending for home improvement projects. Happy hammering!

Best HELOC lenders

A home equity line of credit, or HELOC, acts somewhat like a credit card, using your home as collateral. HELOCs have variable rates, and you tap your equity only when you need it.

 

suntrust mortgage
  • Convert all or part of the HELOC into a fixed-rate option.
  • Maximum loan-to-value 89.9%.
  • Discount introductory interest rate on initial advances of at least $25,000.
  • SunTrust review.
  • Line amounts from $10,000 to $1 million.
  • Rate discounts for certain customers who withdraw at least $25,000 at closing.
  • Multiple draw methods.
  • Flagstar Bank mortgage review.

 

» MORE: Best HELOC lenders

Best cash-out refinance lenders

If you have plenty of equity in your home, you can pay for home improvements by refinancing your mortgage for more than you currently owe. You collect the difference in cash; that’s why this form of refinancing is called a cash-out refi. The cash can be used to pay for the renovations.

Rocket Mortgage
  • Gives a cash-out refi decision in minutes.
  • Online application automatically imports much of the data needed.
  • Mortgage bankers are available for assistance.
  • Rocket Mortgage review.
  • Offers cash-out refinancing for veterans and service members who have VA home loans.
  • Client advocate team is staffed by former senior enlisted leaders in the armed forces.
  • Borrowers with non-VA loans may use the cash-out refi option to refinance into the VA program.
  • Veterans United review.

 

» MORE: Best cash-out refinance lenders

Best Fannie Mae HomeStyle lenders

A HomeStyle mortgage allows home buyers and refinancers to roll the costs of renovations into the loan. Qualified first-time home buyers can buy with down payments as low as 3%.

  • Available for purchases and refinances.
  • Get a HomeStyle loan with a down payment as low as 5%.
  • Lender recommends HomeStyle to fix up older homes in established neighborhoods.
  • PrimeLending review.
  • Combine purchase or refinance with renovation costs.
  • Serves all 50 states and the U.S. Virgin Islands.
  • Lender claims expertise in renovation loans.
  • Flagstar Bank mortgage review.

 Best FHA 203(k) lenders

The Federal Housing Administration’s 203(k) program lets borrowers include renovation costs in an FHA-insured mortgage. The loan amount takes into account the home’s current value, its future value after renovations are completed, and how much the work will cost.

  • Says it’s the nation’s top originator of FHA 203(k) renovation loans.
  • Originates both types of 203(k) loans: Those for minor upgrades for up to $35,000, and those for structural repairs that require a consultant.
  • Renovation mortgage originators provide personalized service.
  • Homebridge Financial Services review.
  • Purchase or refinance with an FHA 203(k) loan.
  • Both types of 203(k) loans are available: streamlined (for minor repairs and upgrades) and standard (for structural repairs requiring a consultant).
  • English/Spanish bilingual agents are available.
  • New American Funding mortgage review.

 

» MORE: How a 203(k) loan works

Best unsecured personal loan lenders

Unsecured personal loans are not backed by collateral such as one’s home. The interest rates are higher, but borrowers don’t put their homes at risk. These prominent mortgage lenders also offer personal loans to pay for home improvements.

  • Terms of up to 12 years for home improvements with loan amounts from $5,000 to $100,000.
  • Minimum credit score of 660, plus several years of credit history and a variety of credit accounts.
  • No appraisal required.
  • LightStream personal loans review.
  • Terms of three to seven years with loan amounts from $5,000 to $100,000.
  • Minimum credit score of 680, but most borrowers have scores of 700 or higher.
  • No fees for origination or late payments.
  • SoFi personal loans review.

 

» MORE: Shop personal loans for home improvements

Best home improvement mortgage lenders: Summary

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