Renovation Mortgage Terry Terzakis Mortgage Banker M 203-231-0549 D 475.888.0963 F 860.777.1872 W www.TerryTerzakis.com E firstname.lastname@example.org
Yourdream home could be found in a property that just needs a little lovin’. Thesedays those properties are known as fixer-uppers, and they’re a great solutionfor those who want to modify an existing home exactly to their liking. Seeingpotential in a property that need renovations can be very rewarding and oftencheaper than building a home from the ground up or buying a home that’s readyto move in. Have you ever looked at a home and thought “this house would beperfect if only it had…” or “I love everything about this house except…”?
Is a Fixer-Upper Right for You?
Youmay be wondering if buying a home that needs renovations is the best choice foryou. Ask yourself these questions before you venture into these kindsof properties to assess whether you’re prepared to renovate:
Do you have the financial resources? After writing checks for yourdown payment and closing costs, do you have enough assets remaining to fix upyour new home? If not, a Renovation Mortgage may be your solution.
Do you have the time to invest? These renovation and DIY projectscan take a while, so make sure you have a flexible schedule and enough freetime to get things done. If not, a RenovationMortgage may be your solution.
Do you have the necessary construction skills? While not completelynecessary, it’s important to know how these projects will get done. Can you doany of it yourself? Do you have any willing friends or family members to lend ahand? If not, a Renovation Mortgage maybe the solution.
Once you figure out whether buying a fixer-upper is right for your situation,it’s imperative that you receive the right home loan!
Financing Your Fixer-Upper
ARenovation Mortgage is one mortgage loan that combines both the purchase of thehome plus the cost for your renovations all rolled into one low-rate fixed loanwith only a small down payment, sometimes as low as 3%. A licensed and insured contractor is requiredto perform the work and provide a detailed quote of the project. This cost is added to the price of the homeas the “total acquisition cost” and the down payment is calculated off thistotal. The home will be appraised basedon the proposed renovations, often times adding instant equity even when onlyinvesting a small down payment.
The type of changes you may want to make toyour new home with a renovation mortgage is almost limitless depending on theprogram. From cosmetic updates to a tear-down and rebuild. Replacingmechanicals, roofs and windows. Finishing the basement and additions. The chef’s kitchen or adding thatextra bathroom. Handicap accessibility. Thisis your opportunity to truly create your dream home.
FHA 203(k) is strictly for owner-occupant transactions with as little as3.5% down payment. Flexible underwritingguidelines even on multi-family homes make this a popular choice.
Fannie Mae HomeStyle is a similar program but also allowsfinancing for investment properties and vacation homes. Luxury items such as anew built-in swimming pool, tennis court, or boat dock are also allowed.
VA Renovation is a program specifically for eligibleVeterans. VA mortgages do not requireany down payment even when including the cost of renovation on top of the priceof the home. The allowed renovations area bit more limited on this program, however.
USDA Renovation for homes in designated “rural” towns onlyalso do not require a down payment.
Working with a Lender
Of utmost importance is to work with a lenderexperienced closing Renovation Mortgages. Your lender will help guide you tothe appropriate loan program to accomplish your goals. Your lender must have a thorough understandingof the details of Renovation Mortgages to ensure a successful transaction. These are very unique and intricate programsnot offered by all mortgage lenders so be sure to work with a true RenovationMortgage expert.
Fixer-uppers can be an excellent pathway to owning your dream home. Make sureyou conduct some vigorous research and talk to professionals who know whatthey’re doing! Oh, by the way, a Renovation Mortgage is also available as arefinance!