How to Buy a Fixer with a Renovation Loan
You can't get a loan from the bank to buy the home until the repairs are done, and you can't make the repairs until you buy the home! Even if you could get someone to help you buy the home (either bank or family member), where will money to make repairs come from? It's a Catch-22.
A Renovation Mortgage (203k Loan) may be the answer, and an experience Renovation Mortgage Originator, one who specializes in these types of loans and has access to industry-leading experts, would have the expertise and resources to help make this a reality. A Renovation Mortgage could help you purchase or refinance a property while including the cost of making repairs and improvements, with as little as 3.5% down.
A Renovation Mortgage can be used to make improvements to an existing one to four unit residence in one of three ways:
To purchase the property and the land it's on to rehabilitate it
To purchase the property and land it's not on in order to move it to a new location and rehabilitate it
To refinance existing liens secured against a property and rehabilitate it.
A Renovation Mortgage allows the homeowner to purchase a property and include the cost of certain home repairs into the mortgage loan. It's not a second mortgage or a separate credit line; it keeps all of that combined into one interest rate and one monthly payment.
With a Renovation Mortgage, renovation expenses are spread out over the life of the loan . For example , if a homeowner needs to do a total kitchen remodel, they can spread that $20-30,000 out over the life of the 30-year mortgage. It will always be tied to the equity in the home and will become part of the sale price if they look to sell in the future.
Want to learn more? Read and download the full RENOVATION GUIDE here.
