The Difference between Renovation and Refurbishment
My name is Eric Green, I’ve been in the mortgage business for about 20 years. There are so many questions and subjects that I encounter, and with my experience and expertise I’m able to answer those questions when it comes to mortgages and lending.
Someone recently sent me the question:
What is the difference between Renovation and Refurbishment?
The primary difference between the two, well — they often are used interchangeably, but renovation typically refers to restoring something to a good condition or state or repair. Refurbishment implies process of cleaning, equipping, or retrofitting. So those are the basic definitions of each.
Renovation in terms of lending may be describing a loan for people who live in a home but want to make it better. Better exterior, electrical, better windows or appliances. You can also use it when purchasing a home. Once you see the benefits of a renovation loan, even fixer-uppers can be quite attractive.
A new set of french doors and windows, a stylish facade or totally redoing the kitchen, remodeling the main bath. All of these would use a renovation loan, which would mean putting something back to a good state of repair. Those are the two options for renovation financing or using it as a purchase mortgage.
I’ve seen and personally done a 203K Renovation loan on a house that I bought. It was in my family after 40 years — my grandparents place. My wife decided we were going to do a renovation loan. We put about $80,000 into it with repairs and upgrades. a nice one-story ranch. We have a substantial amount of equity in it now, and we couldn’t have done that without a Renovation loan (203K).
In my opinion, it’s the best option to go with buying a house and wanting to fix stuff.
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