First Time Homebuyer? Consider A Fixer-Upper Mortgage

December 16, 2018

First Time Homebuyer? Consider A Fixer-Upper Mortgage!

Written by Elle Tomaszewski,

Did you know there's such thing as a renovation mortgage? I sure didn't.
Today's housing market is filled with first-time homebuyers. The problem is, there aren't enough entry-level homes that are move-in ready. The only solution is to broaden the search to fixer-uppers. Don't worry though -- with a renovation loan, it will cover the purchase price of the home plus improvements. 

Whether new or used, it's hard to find an entry-level home. There's been a steady decline in new construction of entry-level homes as well. Most first-time homebuyers are looking to spend somewhere between $100k-$250k maximum. There just aren't very many affordable homes out there, which leads you to buying a home in need of repairs. 

There are two major types of renovation loans.
If you're interested in a home in need of improvements and renovations, you should look into the FHA 203(k) loan (minimum credit score 500 and 10% down, or 3.5% down with a score of 580 or higher) and the HomeStyle loan by Fannie Mae (minimum credit score 620 and 3-5% down depending on certain factors). Both of these loans will cover the purchase price of a home in addition to renovation costs. These renovations can be both structural and cosmetic and they can begin renovating as soon as you've closed on your new home.

Things to look out for.
Make sure you get a detailed cost estimate including costs for inspections, permits, consulting fees and material costs. Often times, people fail to get the accurate estimate which will cause a pitfall. Once you decide on a home, hire a HUD consultant to help you get estimates from contractors. Your lender will need copies of those estimates.

Hopefully, with this information, you can finally get the home you want for the price you want! Always remember to think of the Laurie Ann Truluck Team at Sellstate Next Generation Realty for all of your home-buying, investing and selling needs! 

Written by Elle Tomaszewski,

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