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Renovate or Remodel Your Home

Need funds for renovation or remodeling?

Make informed decisions about using the equity in your home to finance home improvements.

Want to finance a home improvement or renovation project? Learn more about mortgage and home equity loan and line of credit options that may help you achieve your goal from Wells Fargo Home Mortgage, the nation’s leading originator of renovation financing.

What types of improvements can I make using the equity in my home? Show Details

 
Financing a renovation or remodel using your home equity may allow you to:

  • Update your home’s features or enjoy more living space with a newly designed kitchen, expanding a home office, or a master-bedroom suite — while remaining in your own neighborhood.
  • Make your home more functional by creating a separate living area for a family member or updating your bathrooms.
  • Personalize your home to fit your lifestyle by adding enhancements such as an enclosed porch, deck, or swimming pool.
  • Make your home more energy efficient with a new roof or replacement windows.
Home improvements have the potential of turning your house into a dream home. Whatever improvements you envision, Wells Fargo may be able to help you make your vision a reality.

What are the benefits of using the equity in my home to renovate or remodel?Show Details

 
Using the equity in your home may provide the following advantages:
Possible lower costs:
  • Gain potential tax benefits. Home equity interest payments are generally tax deductible. (Consult your tax advisor regarding the deductibility of interest.)
  • Lower your monthly payments. Interest rates on home equity financing are typically lower than credit cards or personal loans, which could mean lower monthly payments.
  • Flexible fee payment. Select the home equity closing cost option that meets your needs.1
Flexibility:
  • Benefit from greater financial control. If you’re approved for a home equity line of credit, you can access your variable-rate line of credit during the draw period, paying interest and principal only on the funds you use.2
  • Increase your borrowing power. If the equity in your home isn’t sufficient and you want to finance improvements, consider our Refinance & RenovateSM Loan, which may allow you to borrow funds based on your home’s estimated value after improvements are made.
Myth: There is no financial benefit to taking out a Home Equity Loan or Line of Credit. Truth: The interest on your home equity line or loan may be tax deductible, consult your tax advisor.
 

What should I consider when thinking about my home improvement loan options?Show Details

 
While you’re planning your renovation project, be sure to consider the following:
Do I have to hire a contractor?
  • Before you plan on a do-it-yourself project, make sure your financing option does not require a contractor.

Do I have enough equity in my home to finance home improvements?

If the equity in your home isn’t sufficient and you want to finance improvements, consider our Refinance & RenovateSM Loan, which may allow you to borrow funds based on your home's estimated value after improvements are made.

  • You should get an estimate of the cost of the home improvement project. Then, compare this to the estimated equity in your home to see if a home equity loan makes sense as a financing option. Typically, the total, including the new loan, should not be greater than 80% loan-to-value.
  • The equity in your home is the difference between your home’s current market value and what you owe on your mortgage.
  • For a market value estimate, get a list of comparable area sales from a REALTOR® .
  • If the equity in your home isn’t sufficient, you may want to consider our Refinance & RenovateSM Loan. This type of loan may allow you to borrow funds based on the estimated value of your home after improvements are completed.2
  • You may also want to consider a credit card, personal loan or a line of credit that does not rely on home equity. These may be a good choice for smaller projects.

Are you prepared for the unexpected?
  • You may identify additional issues after a repair or improvement project has started. For example, rotted wood could be uncovered during a roof replacement.
  • A project can often run 20% to 30% higher than the original estimates. Be sure you’re ready for these unanticipated costs.

What financing basics should I understand?Show Details

 
If you obtain a home loan to help repair and maintain your home, you will repay more than you borrowed. In addition to your interest rate, term and loan amount, how much you repay is determined by several factors. Here are the components you need to know:
Interest rate
  • The interest rate is the percentage of your loan amount we charge you to borrow money.
  • Interest rates are based on current market conditions, your credit score, down payment, and the type of loan you choose. Check today’s rates.

Discount points
  • One point equals 1% of your loan amount.
  • If you qualify, you may be able to pay one or more points to lower your interest rate. A lower interest rate means lower monthly loan payments.
  • You may be able to finance points as part of your loan amount.
  • Points are usually tax deductible. (Consult a tax advisor on the deductibility of interest.)

Origination charge
  • The amount that includes all charges (other than discount points) that all loan originators (lenders and brokers) involved will receive for originating the loan.
  • This charge covers items including fees, document preparation, and underwriting costs, and other expenses.
  • If you qualify, you may be able to finance the origination charge as part of your loan amount.
  • For home equity financing select the closing cost option that meets your needs.1

Loan term
  • Your loan term is the amount of time you have to pay off your loan balance.
  • Shorter loan terms typically mean higher monthly loan payments, but often have lower interest rates. And if you pay off your loan balance within a shorter term, you may pay less in total interest than with a longer-term loan.

Remember that interest rates only tell part of the story. The total cost of a loan is reflected by the interest rate, discount points, and origination charges. This total cost is known as the annual percentage rate (APR), which is typically higher than the interest rate. The APR enables you to compare loans of the same dollar amount by considering their total annual cost.

View loan options now.

Depending upon your loan type, property location, property type and loan amount, you may incur other monthly or annual expenses such as mortgage insurance, flood insurance, and homeowners association fees.

What should I know about planning a home improvement project?Show Details

 
When you are planning your home repair project, be sure to consider the following components:
Define the project
Create a list of things you would like to accomplish.
  • Put them in order of most important to least important. Remember, your budget might not allow you to complete everything on your list so it’s important to prioritize.

Create a budget
  • If you get home improvement financing, it is an additional expense beyond your current monthly mortgage. Be sure you can comfortably manage the payment.
  • Calculate how much you can contribute to the project and how much you may need to borrow.

Should you decide to use a contractor
  • The contractor with the lowest price is not always the right person for the job. Balance long-term quality against cost.
  • Select a contractor who has proven expertise in your type of project and the appropriate licenses. Always check references and the Better Business Bureau.
  • If you use our Refinance & RenovateSM Loan we’ll verify the contractor’s credentials. This detailed check includes supplier references, any contractor liens and bankruptcies, and confirms insurance and licensing. (This is not for home equity loans or lines of credit.)

Determine the value
Will your home improvement or repair be worth it to you? Improvements that may add value include:
  • Creating visible curb appeal – such as exterior siding.
  • Adding or improving functional living space – such as a master bedroom suite, home office or a remodeled kitchen.
Remember, a number of factors may determine whether you recover some or all of your expenses. These may include how long you remain in your home, the type of improvements you make, and the typical features of homes in your area.

How do I estimate how much I might be able to borrow?Show Details

 
The amount you may be able to borrow is based on the available equity in your home, as well as other factors such as your credit history, loan characteristics, and property location. To get a very general idea of your available equity for financing purposes:
  • Make an estimate of your home’s current market value
  • Multiply your market value by .80
  • From that amount, subtract what you owe on the mortgage and any outstanding debt secured by the property

The result will give you an idea of the equity in your home that may be available for financing.

Example (for illustrative purposes only):
If your current market value = $200,000

And your total existing mortgage and any outstanding debt secured by your property = $120,000
$200,000 x .80 = $160,000
$160,000 - $120,000 = $40,000 estimated available equity

We also have tools and resources that can help you.
  • Use our home equity calculator to get an estimate of your available equity and explore your home equity options
  • Consider a cash-out refinance to access your available equity, as well as refinance your existing mortgage

For your mortgage needs:
1-866-383-8421
For your home equity needs:
1-888-667-1772

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Market Value

 
The most probable price which a ready, willing and able buyer would pay and a willing seller will accept, both being fully informed under no pressure to act. The market value may be different from the price a property can actually be sold for at a given time (market price).
 
 
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Bank closing costs

 
Wells Fargo Home Equity accounts are free of origination fees, and fees for the application, appraisal, and another bank charged fees.

Depending on your state, you may be responsible for mortgage taxes, attorney fees and other third-party fees.
 
 
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Closing Cost Option

 
Most home equity financing offers two options:
Have us pay your closing costs
  • You pay a higher interest rate to cover all required third party costs
  • This option is not available for financing greater than $500,000
Pay your closing costs
  • You pay a lower interest rate
  • Pay with your loan proceeds, line of credit, or a check

    For details, please call 1-888-421-4672.
 
 
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Draw Period

 
The length of time that you can access funds from your account. It runs for 10 years plus one month from the date you opened your home equity line of credit.1
 
 
 
If you are a servicemember on active duty, prior to seeking a refinance of your existing mortgage loan, please consult with your legal advisor regarding the loss of any benefits you are entitled to under the Servicemembers Civil Relief Act or applicable state law.
1
The home equity line of credit Annual Percentage Rate (APR) is variable and is based on the highest Prime Rate published each day in The Wall Street Journal Money Rates Table (the "Index"), plus a margin. The index as of the last change date of December 17, 2008, is 3.25%. As of April 11, 2014, current margins for lines of credit from $20,000; maximum $500,000 secured by owner-occupied properties with 70% combined loan-to-value range from 3.750% to 0.375% resulting in corresponding variable APRs ranging from 7.000% to 3.625%. For larger loan amounts, please contact us. Minimum APR is 1.00%; maximum APR is 18%. APR does not include costs. Your APR will be based on the specific characteristics of your credit transaction, including evaluation of credit history, CLTV, property type, amount of credit, term and geographic location. There is a $75 annual fee which is waived for the first year. If provided for in your original contract, the fee will be waived thereafter if you maintain a minimum average daily balance of $20,000 or more for twelve consecutive months previous to the annual fee assessment date. The prepayment penalty fee will be $400 for lines of credit $20,000 or greater. Opening fees may be paid to Wells Fargo, its affiliates or third parties and range from $19 to $9,000 depending on the property type, the state in which the property is located and the amount of credit extended and include applicable state or local mortgage taxes. This Account has a Draw Period of 10 years plus 1 month, after which you will be required to repay any amounts within a 15- or 20-year term, depending upon your account balance. Hazard and, if applicable, flood insurance required.
2 The interest on any portion of credit greater than the fair market value of your property is not tax deductible for Federal income tax purposes. You should consult your tax advisor regarding the tax deductibility of interest and charges.
Equal Housing Lender