As mortgage rates and house prices continue to rise in the coming year, the supply of homes on the market is expected to stay low. Despite all this negative sounding news, there is a great solution for homebuyers to obtain the dream home they have always wanted. Beat out the heavy competition that exists within the housing market with a Renovation loan!
In a competitive market with low home inventory, your best chance to purchase a home without getting stuck spending a fortune in a bidding war may be to purchase a property in need of updates or renovations. A house with good bones but an unattractive face, or a “fixer-upper” as they’ve come to be known, may be listed below market price and potentially end up with fewer offers and views as it sits on the market. These houses, with a well thought out plan, can usually be spruced up through a handful of renovation and remodeling projects. Renovation loans allow for the purchase of a house below your budget and renovate it up to what is affordable.
Renovation loans such as the FHA 203k or the Fannie Mae HomeStyle loan were created so that homebuyers could purchase a home they felt had potential, and could make their own. Using these loans, homebuyers can borrow money for a house and its desired renovations all at once without the need for a second loan.
FHA 203K Renovation mortgages allow buyers to borrow the funds for both the purchase and renovation of a home, based on the projected value of the finished product, and may be used for almost any renovation project except luxury items. A HomeStyle Renovation Mortgage allows for the purchase and financing of up to 50% of your property’s post renovation value, and can be used for luxury additions such as swimming pools as well as room remodels and any other permanent renovation that will add value to the home.
Fixer-uppers and home remodels are currently all the rage, and, considering the housing market projections, are expected to rise in the coming year. There are always ways for buyers to get their dream home, it just requires a little imagination and the ability to see past the imperfections of the current home. Thinking outside of the box will help today's buyers navigate the competition in the current market and renovation loans offer buyers a solution to still get their dream home.
Contact one of our Loan Originators for details on how to finance and renovate your dream home today!