There are so many options out there for calculating your mortgage payment with plugging in just a few figures; the loan amount, interest rate, and the life of the loan.
When it comes to mortgages from a renovation loan, like the FHA 203k Loan, the concept is the same but how we achieve the loan amount is a bit different. Typically, the loan amount is calculated by subtracting the down payment from the purchase price but when calculating the loan amount for a 203k Loan we must factor in the renovation costs. Below we’ve included an equation to provide a general calculation of a 203k loan amount, as well as, a list of average home renovation costs when considering estimations for your renovation budget.
To calculate the loan amount
Purchase Price + Renovation Budget + (Renovation Budget x 10%)= Loan Costs
Loan Costs x 3.5%= Down Payment
Loan Costs – Down Payment= Loan Amount
Loan Amount Calculation Example
National Average of Home Renovation Costs as of January 2018
Bathroom Remodel $9,274
Install a Shower $3,096
Install a Bathtub $2,838
Kitchen Remodel $19,920
Install Cabinets $4,621
Install Countertops $2,819
Sod the Yard $1,709
Build a Deck $6,919
Deck Repair $1,379
Install a Roof $6,626
Repair a Roof $653
Install Flooring $2,890
Install Windows $4,745
Paint Exterior $2,575
Paint Interior $1,656
New Pipe Install $1.134
Install a Septic Tank $4,583
Install Electrical Wiring $1,324
Calculating your monthly mortgage payment and other information is a bit more involved than the loan amount itself and if you don’t want to do all this calculating, we do not blame you one bit! We would be happy to assist you in figuring out these figures as well as assisting you in determining which loan is best suited for you and your circumstances. Visit us today for more information on the 203k Loan!