Should I Buy a Fixer Upper
Should I Buy a Fixer Upper
By: Tanya Torres
The image of your dream home has stayed constant in your mind and you have worked hard to get to the place that you need to be in to own a home. At this point, it seems like everything is aligning and you are on track to owning your dream home. You have a good credit score, you are not behind on anything, you have a downpayment and everything. However, searching for your dream home is ending up becoming frustrating and you feel overwhelmed with all the houses available for you to look at. Nothing seems to fit into what you would want in a home so at this point you are wondering whether you should just quit and continue renting or find a fixer-upper home to repair. You’ve seen the DIY shows and you know you can either do the same job or hire someone to help you. However, you might be wondering whether this is a good idea for you or not, which is why we have a list ready to go to help you figure out if you should take out your toolbox or opt for a new home.
Does it work for you?
When you are looking to buy a home, there are a lot of factors in purchasing a home that may not work for you which can make it incredibly hard to find a home that meets your needs. If you are struggling to meet the requirements to owning a home it might be because you have a weak credit score, your credit score history is not as good as you thought, the downpayment is too much for you, limited inventory, high prices and so on. However, if you are willing to pull up your sleeves and get dirty so you can work on a home and turn it into your dream home then that is one way to overcome your obstacles. Buying a fixer-upper home can seem like a lot of work, but it is a shortcut that is appealing for those who want to be a homeowner and not a renter anymore.
Home Renovation Loan
A home renovation loan offers funds that can fix up a home and can come from mortgages that offer personal loans or fixer-upper funds. However, if you are choosing to purchase a home that needs repairs then you the renovation loan will depend on the type of financing you apply for so be ready to look into which loan is right for you whether it is a Fannie Mae HomeStyle loan or something else.
When Should You Consider a Home Renovation Loan
Choosing to renovate your home or a fixer-upper can be a huge costly project that can leave you feeling drained. However, if you are confident that this upcoming repair project will be beneficial for you because it will increase your property value or allow you to make the fixer-upper into your dream home then a renovation loan is ideal for you. Before you begin your renovations, be sure to look into how much the repairs will cost you, if it will save you money in the long run and make your home safer. Lastly, when you are working on your fixer-upper home, you will need to be aware of how much you are investing in your remodeling. Improving your home to the point that the house is way more expensive compared to others in your neighborhood after the repairs will make it difficult to sell your home if you ever decide to move.
Find the Right Fit For You
Although we might be dreamers when it comes to any aspect of our lives, it does not mean that everyone should purchase a fixer-upper house that is in total disrepair. If you have all the time in the world and money to invest in a house that needs a lot of love then go ahead and purchase the fixer-upper. However, before you purchase the fixer-upper home then you can hire a professional contractor to estimate how much the cost of all the repairs will be before you make your offer to the seller.
When you have a renovation loan, you have to be prepared to deal with extra consultations, inspections and multiple appraisals. Although these obstacles will seem tedious and not needed, it is important to be aware that the lender is not only keeping an eye on their investment in your home but they are watching out for your best interest too. When you borrow from a lender to improve a home, you will either have to hire a HUD consultant or go through multiple appraisals, it all depends on whether you are using a standard FHA 203(k) loan or the CHOICERenovation loan.
Lastly, remember that when you are fixing up a fixer-upper home that you are going to be able to create a home that showcases your style from every inch of it. Although you will have plenty of work to deal with and be waiting for it to be move-in ready, your reward will be worth the effort and wait.