Even for recurring buyers who are looking for a better house with different locales and neighborhoods to feel more secure. In fact, thanks to the already low inventory of houses that are for sale in the market, making sure to fins a newly renovated and refurbished house, especially one that is on a good and stable budget is slim.
What Exactly Is A Fixer-Upper?
A fixer-upper is an already existing family home that is in dire need of an upgrade or an update depending on how strongly built and supported the house is. As long as the overall house structure is good enough for a renovation, that is essentially a fixer-upper.
In reality, renovating and updating the house is not as easy as it sounds or even appears to be like in those Drew brother shows. Sometimes those projects are very complicated to pull off at times and once the demolition even starts, it can go over budget and cause further problems from there.
That is why we have decided to pull together a shortlist of what to consider when it comes to a fixer-upper and to ensure you if you made the right choice or not.
Its Mortgage Options
What these are, are loans that allow you to finance the house and its current updates and improvements simultaneously. This helps to pay off those renovations at a much-extended period of time and can even be done within a low-interest rate as well, unlike most financing options.
FHA 203(k)-
These are offered with the help of the FHA, or the Federal Housing Administration. What they do is give loans out to those who have lower income as well as credit. These are also used for renovation projects.
VA Renovation Loan-
Thanks to the Department of Veterans Affairs’ recent updates on this loan and its guidelines, the new VA Renovation Loan can be used for renovations and purchases of said home. This needs to be approved by a VA contractor and sometimes there are limitations towards which projects are eligible. Sometimes a construction fee is needed too.
HomeStyle-
Something that is given thanks to FanniMac, this mortgage option does require more credentials. These include higher credit scores than what FHA can allow in their loans, and that alone can aid in giving you the required loan needed. Most renovations are eligible for this loan, even those that are considered to be “luxury” status.
CHOICERenovation-
This one is given by Freddie Mac and allows for renovations/improvements to homes that are strong and resistant to natural disasters. These are guaranteed for most borrowers that need loans, especially if they can do the renovations themselves.
Most, if not all fixer-uppers when it comes to their mortgages can also help cover the payments, especially if you need to live somewhere else while the renovations are being set and done. This may increase the budget during the process, so it is also best to ensure that you have additional funds available to you during the process.
The Work & The Budget
Sometimes with the traditional mortgage route, it has to all be paid either with cash, cards, or with personal loans. With these options, it helps to put a ceiling, albeit low, when it comes to your overall budgeting, and limitations can be brought up during the process. If that is the case, then simpler renovations and improvements can help to make things easier.
With the help of renovation loans, they can expand the budget you have on the repairs and improvements while also help to tackle more projects that are on a larger scale. With that listed, it can create the work and budgeting with ease to allow for more renovations to be taken care of. However, make sure that these mortgage options can place certain limits as to what kinds of repairs and improvements that you can do.
Even if you hire a pro or do it yourself, there are still challenges that you need to be presented with during the process. Like for some that are looking at foreclosures, they would need to be delayed thanks to the mortgage process. Now, with the bank-owned listings and properties, they can be negotiated with the lender who holds the property and the offer can be rejected more than once. This can take weeks to sometimes even months.
Supervision & Appraisals
For the standard FHA 203k loans, they require that you hire someone that is in the Department of Housing & Urban Development that can help approve the renovations and improvements that you are planning to perform on the property. From there, they can also help out with contractor payment management as well as inspections of the property during each of the phases of its renovation process.
With the CHOICERenovation loan, it can make things easier with appraisals, especially if there are multiple ones. This can help and confirm the overall all materials and workforce needed for the process as well as certify what was promised in the contract made for the renovated home.
There is no doubt that you will have these hurdles thrown at you while already having the issues that are needed to be fixed during the renovation process. However, if you make sure that the work is within a timely schedule, on budget, then it helps to add more value to the house on the market.
The Satisfaction
Once everything is done, the hurdles are mounted and the challenges are all done and clear, then the rewards are there for the seeing. It will be filled with all those personalized touches and improvements that can help and provide a nice and safe atmosphere for those who are looking for a nice home.
SyncBrokerage Real Estate of Los Angeles
syncbrokerage.com
Office 818-770-3673
Email: careers@syncbrokerage.com
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Intersection of Ventura Blvd., & Topanga Canyon Blvd.
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