A Fixer-Upper for Your First Home? Here Are Your Mortgage Options.

With the supply of new homes tighter and home prices higher as a result, it’s not surprising why some turn to fixer-uppers. These homes can be less expensive to acquire and fetch a good resale value. There are mortgage products to pay for the purchase of a fixer-upper and its renovation/improvement costs at the same time. What’s a Fixer-Upper, By the Way? In real estate, a fixer-upper is a house in need of repairs to make the home liveable and comfortable. The buyer usually hires an expert, usually a contractor, to tag along and examine the condition of the home and list what needs to be done. While it all takes some minor repairs to restore a property, others would require far extensive work in thousands of dollars. Because these repairs are part and parcel of the house to be purchased, some programs such as the FHA’s 203k loans and Fannie Mae’s HomeStyle® Renovation mortgage roll these two capabilities – purchase and renovation – into a single, dual-purpose mortgage. Get to Know the Mortgage for Your Fixer-Upper First, we have the 203k loan. There are two kinds that match the extent of the rehabilitation needed in the home. Standard. This covers all eligible activities to rehabilitate the...


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