Considering adding a guest house or converting space on your property for family use or as an investment? Look into a Cash-Out Refinance loan for an Accessory Dwelling Unit (ADU). Whether it's a granny flat, tiny house, or backyard cottage, an ADU is a smaller, secondary home on your property that includes its own kitchen and bathroom. Permitted on 2-unit and 3-unit properties, ADUs offer great flexibility and potential benefits.
Adding an Accessory Dwelling Unit (ADU) to your home can boost its value. A Cash-Out Refinance lets you access your home's equity, which grows as you make payments over time. This type of refinance replaces your current mortgage with a new one for a larger amount, allowing you to take out the difference in cash.
You can use this cash to fund your home improvements or renovations. After settling your existing mortgage and closing costs, the remaining cash is given to you at closing. With a Cash-Out Refinance, you might also secure a fixed interest rate, ensuring a consistent mortgage payment throughout the loan term.
All loan types are eligible, such as Conventional, Jumbo, FHA, VA, and Home Equity Lines of Credit. For personalized advice, speak with a loan officer.
As a landlord, adding an Accessory Dwelling Unit (ADU) can boost your income and help expand affordable housing in your community. This extra income is perfect for building or boosting your retirement savings.
ADUs are eco-friendly and maintain the charm of your neighborhood, supporting multigenerational living and allowing seniors to age in place. They're versatile, appealing to families looking after elderly relatives, needing an affordable guest house, or a space for a home office. They also offer a more affordable housing option for adult children squeezed by tight housing markets.
While detached ADUs can fetch higher rental prices compared to apartments, they remain an affordable option for single renters who don’t need much space.
Additionally, ADUs can significantly increase your property's value, particularly in high-demand housing areas.
Explore the advantages of an ADU home loan:
To qualify, you generally need a good credit score and sufficient home equity. Homeowners can expect to cover service fees and closing costs. Most lenders will also ask for a home appraisal and have specific requirements for approval.
What is an ADU Loan Program?
Interested in adding an Accessory Dwelling Unit (ADU) to your property? ADU loans can help, and they're usually based on your home equity, income, savings, and credit score.
What Does ADU Stand For?
ADU stands for Accessory Dwelling Unit, also known by various other names.
Can You Finance an ADU?
Absolutely! Financing an ADU is straightforward. For details, speak with a loan officer.
Can a VA Loan Be Used for an ADU?
Yes, if you qualify for a VA loan, you can use cash-out refinancing to fund an ADU. The VA guarantees these loans up to 100% of your home’s value, and they don't require down payments or private mortgage insurance (PMI).
Ready to Explore ADU Loans?
Contact us to discuss your options and find the perfect loan for your needs. Check out current mortgage rates here.
Our loan officers are ready to help you choose the best financing option for your home or project.
Whether you are looking to purchase a home or upgrade the one you have, it all starts with choosing the right lender and the right home loan.
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