What is a Fixer Upper and Why Should You Consider Buying One?
So, you’re thinking about buying a home, but you’re not sure whether to go for a move-in ready home or take on a renovation project. Have you ever considered fixer upper homes for sale? A fixer-upper is a property that requires some level of repair or renovation. The idea is to purchase the home at a lower price and then invest in making it your dream home.
How Do I Find Fixer Upper Homes Near Me?
Finding fixer upper homes for sale near you isn’t as daunting as it may seem. You can start by working with a real estate agent who specializes in this type of home (we can refer you to one of our trusted real estate partners if you don’t have an agent yet). They can help you navigate listings of fixer uppers for sale near you.
Additionally, you can use online platforms that filter search results to show only fixer upper houses for sale. Don’t forget to check out auctions and foreclosure sales; they often have cheap fixer upper homes for sale.
What Are the Pros and Cons of Buying a Fixer Upper?
Before diving into the world of fixer uppers, it’s essential to weigh the pros and cons.
- Lower Purchase Price: Fixer upper homes often come at a lower purchase price compared to move-in ready homes.
- Customization: You get to renovate the home to your taste.
- Potential for Profit: If you’re savvy, you could sell the renovated home for a profit.
- Renovation Costs: The cost of renovations can add up quickly.
- Time-Consuming: Renovations take time and can be stressful.
- Uncertainty: You might uncover additional issues during the renovation project.
Can I Get a Mortgage for a Fixer Upper?
Yes, you can! Traditional mortgage payments might not cover the cost of renovations, but specialized loans like the Federal Housing Administration (FHA) 203(k) loan can. (We expand more on 203k and other renovation loans more below.) This type of fixer upper mortgage allows you to combine the purchase price and renovation costs into a single mortgage payment. So, not only can you buy a fixer upper, but you can also secure a mortgage for fixer upper renovations without spending a significant amount out of pocket.
How to Buy a Fixer-Upper House With No Money?
Is it possible to buy a fixer-upper with no money down? While challenging, there are options like securing an FHA 203(k) loan, which requires a lower down payment. You can also look into grants and subsidies for home renovations. However, it’s crucial to consult with a mortgage expert at JVM Lending or your financial advisor to understand the implications fully.
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September 22, 2023
View mortgage rates for September 22, 2023
What Should I Look for When Buying a Fixer?
When buying a fixer upper home, pay close attention to:
- Structural Integrity: Ensure the home’s foundation, walls, and roof are sound.
- Property Taxes: Check the property taxes to ensure they are manageable.
- Home Inspections: Never skip this step – even if you are planning to put significant work into the home. It will reveal any hidden issues.
- Renovation Costs: Get an estimate to understand how much you’ll need to invest.
Should I Buy a Fixer-Upper or a Move-In Ready Home?
The answer to whether you should buy a fixer upper or move-in ready home depends on various factors like your budget, time, and willingness to manage a renovation project. If you’re looking for a lower purchase price and the opportunity to customize your home, a fixer might be the right choice. On the other hand, if you’re not up for the challenges of a renovation, a move-in ready home might be better.
True or False: Nobody Wants a Fixer Upper
Contrary to the belief that “nobody wants a fixer upper,” many people find these homes to be hidden gems. They offer the opportunity to purchase a home at a lower price and customize it to your liking. Plus, if you play your cards right, you could end up with a home that’s worth significantly more than you invested.
How Do I Estimate the Cost of Renovations?
Estimating the cost of renovations is crucial when buying a fixer upper. Work with contractors to get quotes for the work that needs to be done. Factor in a buffer for unexpected costs. Add this to your purchase price to get a realistic idea of your total investment.
Worried about the costs associated with a fixer? With a renovation home loan from JVM Lending, you can wrap the cost of BOTH the home purchase and the renovations into a single mortgage. This streamlined financing option simplifies your financial planning, allowing you to focus on turning that fixer-upper into your dream home.
Unlock Your Dream Home with JVM Lending’s Renovation Home Loans
What is a Renovation Home Loan and Why Choose One?
If you’ve been eyeing fixer upper homes for sale but are concerned about the financial aspects, a renovation home loan could be your golden ticket. Offered by JVM Lending, these specialized loans allow you to bundle the cost of the home and the renovation into a single mortgage. This is a game-changer for anyone looking to transform a fixer-upper into their dream home.
- Streamlined Financing: One loan covers both the home purchase and renovation, simplifying your financial planning.
- Quick Equity Building: Renovations often increase home value, helping you build equity faster.
- Flexible Property Types: Whether it’s a single-family residence or a 2-4 unit property, renovation loans have you covered.
- Personalized Home: From essential repairs to luxury upgrades like swimming pools, make the home truly yours.
- Credit Score: Generally, a minimum FICO score of 620 is required.
- Down Payment: Varies by loan type, but can be as low as 0% for USDA and VA renovation loans.
- Occupancy: The property usually needs to be your primary residence.
- Contingency Reserve: Often, a minimum of 10% is required, which can go up to 20% based on the property’s condition.
In-Depth Look at Different Renovation Home Loan Programs
JVM Lending offers a variety of renovation home loan options, each with its own set of guidelines and benefits:
- FHA 203k Limited: Ideal for non-structural repairs like cosmetic updates. Minimum down payment is 3.5%.
- FHA 203k Standard: Allows for structural repairs and has a minimum repair amount of $5,000.
- Fannie Mae® HomeStyle®: Offers the most flexibility, including luxury items and a minimum down payment of 5%.
- Freddie Mac CHOICERenovation®: Similar to HomeStyle®, but can be combined with the Home Possible® program for added benefits.
- USDA Renovation Standard and Limited: Perfect for rural areas with 0% down payment.
- VA Renovation: Exclusively for veterans, allowing for minor structural repairs with no down payment.
Pros and Cons of Renovation Home Loans for Fixer Uppers
- One-Stop Financing: Simplifies your financial planning.
- Instant Equity: Increases the value of your home.
- Customization: Make the home fit your needs and desires.
- Flexible Property Choices: Opens up a broader range of potential fixer upper homes for sale.
- Potential Cost Savings: Sometimes more cost-effective than buying a move-in ready home.
- Various Loan Options: Multiple types of renovation loans to fit your needs.
- Complexity: More complex than standard mortgages.
- Higher Interest Rates: Sometimes comes with slightly higher rates.
- Stricter Requirements: More stringent eligibility requirements.
- Longer Closing Times: Takes longer to close due to additional steps.
- Risk of Over-improvement: You might over-improve your home, affecting its resale value.
- Budget Overruns: Renovations can go over budget, requiring additional funds.
Frequently Asked Questions
Can I use a renovation loan for luxury items like a swimming pool?
Yes, depending on the loan program. For example, Fannie Mae® HomeStyle® allows for luxury items.
What is the minimum credit score required?
Generally, a minimum FICO score of 620 is required, but this can vary between loan programs.
How do I get started?
To begin your renovation journey, reach out to JVM Lending’s experts for personalized guidance tailored to your needs.
Your Next Steps
Ready to turn that fixer-upper into your dream home? JVM Lending’s renovation home loans offer a flexible and financially savvy way to make it happen.
For more information or to start the application process, contact JVM Lending at (855) 855-4491 or [email protected]. We’re here to help you unlock the home of your dreams!