Why You Should Seek A Renovation Mortgage To Purchase A Fixer-Upper
When you think about purchasing a home, you might think about purchasing a home that is already ready for you and your family to move into. However, buying a fixer-upper with a renovation loan could actually be a better plan for your family. If you're wondering about the benefits of this type of loan and purchasing arrangement, consider the ones listed below.
Find a Great Home for a Good Price
When you look at move-in-ready homes in your area, you might be surprised by just how expensive they are. In many real estate markets, homes are very expensive. However, if you purchase a fixer-upper, you can buy a home for a fraction of the price of a move-in-ready home. Even with the cost of the renovations in mind, you might find that you can purchase the perfect home for your family for much cheaper if you take this route. This could make homeownership a more feasible and realistic option for you and your family.
Ensure You Can Remodel the Home Like You Want To
Buying a fixer-upper and remodeling it yourself has its perks. It allows you to fully customize the home to suit your family's preferences and lifestyle, similarly to if you were having a home built from the ground up. With a renovation mortgage, you can choose how to spend the money to renovate the home. Therefore, you can pick your improvements and finishes.
Avoid Problems With Getting a Mortgage
You might assume that you can take out a regular mortgage on a fixer-upper that you want, then use your own cash out of pocket to pay for renovations. This might seem like a no-brainer, but the truth is that it might not be an option at all. In order to qualify for many mortgages, you have to have a home inspection done that proves that the home is in decent condition. Obviously, many fixer-upper homes will not pass. With a renovation mortgage, on the other hand, it's expected that the home that you're purchasing might need to have some work done on it. Therefore, it won't have to pass a traditional home inspection before purchase, although you might be required to have it inspected after the renovations are done, depending on the details of your renovation mortgage contract.
Avoid Overly Expensive Financing
If you put your renovations on credit cards or pay for them with a separate loan, you might pay higher interest rates. With renovation mortgages, however, all of this money is typically financed at an affordable and reasonable interest rate.
Contact a lender near you to learn more about how to combine your plans for remodeling and mortgage.