The Benefits of Purchasing a Fixer-Upper as your First Home
Buying a move-in ready home is appealing, but there are benefits to purchasing a "diamond in the rough," too. Here are the top 5 reasons home shoppers prefer a fixer-upper.
Pro Mortgage Tip: Did you know that there are home loan programs, especially buying a home that needs renovation? It's true! Contact us to see which option is best for you.
Lower Price Point
Budget-conscious home seekers often check out fixer-uppers first. Properties that need TLC are typically priced on the lower end of the scale, and the slightly lower price may also be just what you need to break into that neighborhood you dream of living in. A word of caution, however. Before making an offer, request quotes from a few contractors to get an idea of what renovations could cost.
When buying a fixer-upper, consider government-backed loans like a Fannie Mae HomeStyle loan or an FHA 203(k) renovation loan. This route is attractive because both loan programs allow you to borrow based on the home's anticipated improved value. You'll also be able to include the costs of renovation into your loan so that you pay less out-of-pocket. Remember that qualifying factors like credit scores, debt-to-income ratios, and down payment amounts will vary between the programs, so contact us for full details.
Renovating your home soon after purchase can also fast track equity growth. Think of your home equity as a type of "savings" that builds over time. When you sell or refinance, you'll get that equity back as cash. Homeowners generally find that they receive the greatest return on investment when updating the kitchen or bath. Outdoor upgrades that increase curb appeal or add square footage are other areas that have a significant boost in equity, too.
With just a few improvements, a property can go from fixer-upper to your dream home. While extensive renovations require a professional, even small changes like installing a tile backsplash or new lighting can make a tired room look fresh, unique, and reflective of your tastes.
Buying a fixer-upper means you could alter your timeline to one that is more comfortable. Some choose to complete any renovations before moving in, thereby avoiding the hassle and the mess. Others decide to renovate over time to budget more effectively and tackle projects one at a time. Either way, you'll have the benefit of setting your own pace while building your dream home.
With rates in record low and the market ripe with opportunity, you'll want to move fast. Get pre-qualified today! It takes just a few minutes and can be done right from our website.