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How to Get a Renovation Loan: An Interview with Scott Storace of PrimeLending

By Scott Storace

Tell us a little bit about your company and the services you offer.

PrimeLending is a Dallas-based residential mortgage originator with more than 290 locations in 42 states. In 2012 and 2013, PrimeLending was listed as the No. 4 mortgage lender in the nation for purchase loans. Offering fixed, adjustable rate, FHA, VA, USDA and jumbo loans, refinancing and relocation programs, PrimeLending is licensed to originate and close loans in 50 states. Founded in 1986, PrimeLending is a member of the PlainsCapital Corporation family of companies. PlainsCapital Corporation is a wholly owned subsidiary of Hilltop Holdings (NYSE:HTH).

Can you briefly explain what a renovation loan is and what it can be used for?

If they like it, now they will love it. That's how we like to refer to home renovation loans. Many homeowners purchase a property that fits most of their needs but in some cases, not all. A renovation loan allows them to add those finishing touches. A renovation loan is a home loan that combines the principal mortgage with additional funds needed, or wanted, to rehab or renovate a property. Renovations can be as minor as putting on a fresh coat of paint. Or they can be as extensive as adding new rooms.

What are some of the advantages of using a renovation loan program versus another type of loan or personal credit?

1. It preserves personal savings. Many homeowners pay cash for their renovations as they accumulate them.
2. You can get all the work done at one time, instead of bit by bit as you have the cash.
3. Interest rates are typically lower than personal credit cards.
4. Mortgage interest is tax deductible in most circumstances, whereas personal interest is not. (PrimeLending is not authorized to give tax advice. Please consult your tax professional for tax advice for your specific situation.)
5. They are available for purchases and refinances.

What are a few of the most popular renovation loan programs and who are they best suited for?

Some of the most popular renovation programs are the Homestyle Renovation loan, HomePath renovation loan and FHA 203K renovation loan. We also offer a variety of smaller, rehab-specific escrow holdback programs as well as a Jumbo renovation loan. So, we really have a program suited for most needs.

Is there anything different about applying and qualifying for a renovation loan compared with other home loans?

The main difference in qualifying for a renovation loan is that we need to evaluate the budget and feasibility of the desired/required upgrades. They must be permanent fixtures and add value to the property.

Do you have any advice for someone in Southern California who recently bought a foreclosure that needs a lot of work?

Don't be afraid of a renovation loan. Interest rates still remain low. It's an excellent time to preserve cash, lock in a low payment and convert a house you like into a home that you love.

What's the best way for people to contact you and your company?

I can be reached directly at 949.973.0141 or by email at SStorace@PrimeLending.com: NMLS number #226339.

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Phone: 949-973-0141

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