The Real Life “Fixer-Upper” Experience
If you are a new homebuyer just starting your home search, or someone who has been looking for that perfect home but you haven’t been able to find something that checks all the boxes on your wish list, you shouldn’t avoid fixer-uppers or older homes.
Everyone has seen a show or two on tv where they make it look so easy for someone to purchase a home in need of repairs and renovations and then build those repair costs into their budget to create their dream home. Is the process really that simple? The answer is…sort of.
When it comes to purchasing and renovating a home, there are a few financing options available to accomplish this goal. The most popular of these products are referred to as an FHA 203K loan or a Fannie Mae Homestyle renovation loan. With either of these renovation specific home loans, a potential home buyer is able to combine the purchase price of the home and the improvement cost into one loan.
The biggest difference between a renovation loan and a standard home loan is identifying the proposed renovations and accurately calculating the costs to do so. For this, a good general contractor is needed. Their job is to take a look at the home as early in the process as possible so that they can provide a detailed estimate for the renovations you want to make to the property. This is what we use to determine the overall loan amount for your new purchase.
The bottom line is- As a future home buyer, remember that you have options, especially if you’ve found a house that’s not picture perfect, but the location is exactly what you had in mind.