What do you do if you’ve found your dream home – but it needs a little (or a lot) of work? It’s in the perfect location, in your price range and you can even see your kids and pets playing in the backyard, but you’re not sure about buying a fixer-upper.
Often for a first-time homebuyer, or buyers with a lower price point in cities with high real estate prices, the prospect of buying a fixer-upper is the best way to access homeownership in a desirable neighborhood. But how do you fully understand what you’re getting into when purchasing a fixer-upper, and what finance options do you have to purchase your home and pay for repairs?
We’ve got a few tips for you:
1. Make sure you have a full inspection. It’s important to know what you’re getting into with a fixer-upper. New cabinets are a much different expense than a new foundation. Ask your real estate agent and home loan team for recommendations for a trusted home inspector.
2. Decide if you can make repairs, or if you will need a contractor. Even items that seem like a small fix can be problematic if you are not prepared. Consider how many repairs and remodels you can do on your own, and where you might need to get a contractor. It’s also important to remember that removing walls or rearranging the floorplan may require specific permits and inspections. It’s better to check with a reputable contractor to make sure your home remodel doesn’t become a nightmare for your pocketbook.
3. Know your financing options. There are many different financing options that will help with the purchase of a fixer-upper. One product, the 203K Renovation Loan offered by the Federal Housing Administration, is a mortgage option that provides the borrower funds to finance the home, as well as repairs. Our qualified associates at Evergreen Home Loans can guide you through the proper loan options that work best for your financial goals.
It may not be perfect on the outside, but if you can see through the scars a fixer-upper might be right for you. Make sure you fully understand the job you are getting into, who will be making the repairs and your financing options. Soon enough you may find yourself turning that fixer-upper house into the envy of the neighborhood and the place you call home.