The rising property prices, as well as the cost of living, have made it difficult for first-time homebuyers to save enough money for the downpayment of their homes. As prices keep on rising, people are turning towards buying homes that need renovations.
Even though this might be the first option for most first-time homebuyers, it can be a blessing to some people. These homes come with an opportunity for you to personalize your home and make it the way you would like it to be.
In the real estate industry, these homes are also referred to as fixer-uppers – properties that need repair even though they can be lived in or used in their current state.
Here are things you should know when buying a home that needs renovations if you are new to home ownership;
First-Time Home Buyer Programs
Buying a first home needs you to be prepared with payment methods and mortgage options. Fortunately, some states in the US such as Washington have some programs that help first-time homeowners achieve homeownership.
When looking for resources to buy your dream home, first-time home buyer programs could help you save some money for renovations. These programs come in handy in making sure that you have the financial muscle to get you through the purchase and renovations.
At the end of the purchase, you need a plan and a budget to help you renovate your new home into the kind of a home you would like it to be. It might be difficult to achieve this without a good plan in place.
Renovation Loans
It is very important for you to consider the kind of loans you have access to when buying a home that needs renovations. Renovation loans can be categorized as types of mortgages that make it possible for homeowners to finance home renovations and improvements.
With these loans, you can pay off the renovations at low-interest rates and over a longer time compared to using personal loans. Examples of these loans include VA renovation loan, FHA 203(k), CHOICERenovation loan, and HomeStyle, among others.
In case you are forced to live in another house during renovations or home improvements, you can use these loans to help cover the payment of your mortgage. You can even get more funds in situations where the estimated cost is exceeded.
Your Budget and Work Needed
Before you start buying a home that needs renovations, it is important to hire a contractor to help you determine the cost of renovation before you even make an offer. However, you also need to determine whether you should DIY or hire a pro for renovations.
Those who get the normal mortgage will have to use a personal loan, credit card, or even cash to pay for the renovations. These financing options might put a drain on your finances and make your life a little bit more difficult.
However, if you decide to take a renovation loan, you can be assured of handling everything that needs to be done to make your home what it needs to be. At the end of the day, make sure that you have enough money to finance the renovations.
Your Satisfaction and Dream
You have always wanted to buy a home since time immemorial. However, looking at the cost of houses today, you realize that you cannot move into a house that is ready for occupation. In addition, you cannot even find a house that meets your requirements even when you have the money.
What do you do? The next option is to start looking for a fixer-upper. This is where you are likely going to see your dream come true. With such a house, you can remodel and renovate it to the kind of a home that you want.
At the end of the renovations, you will have added your personal touches and preferences to your home. It will be just like you built a home for yourself from the ground up. This leaves you with a lot of satisfaction and helps fulfill your dream.
In conclusion, there are different reasons first-time home buyers might decide to go for homes that need renovations. The most common one is the sky-rocketing prices of ready homes and tough economic times. Whatever your reason might be, this is a great form of investment and will ensure that you have a home that meets your taste and preferences.
