Supply for homes right now is tight. That means that buyers probably won’t find their dream home on the first try. However, there is another option: older houses can be fixed up and renovated to create the perfect home. Buying an older, lived in home can be the perfect opportunity to pick and choose exactly what you want, may that be blue walls, central air, or marble counter tops. However, costs to change a home can add up. That is why if you want to update and fix a home, a renovation mortgage could be perfect for you.
“A lot of first-time homebuyers are bargain hunting, but thin inventory does not give them much opportunity,” says Matt Gratalo, loan originator at HomeBridge Financial Services. “Renovation financing lets them buy the ugly duckling house at a discount and turn it into the neighborhood swan.”
How is a renovation mortgage unique?
There are more lenders giving out loans that will help cover renovations. Both the FHA’s 203k and Fannie Mae’s Homestyle loans will help buyers purchase a home and then fix and change it under a renovation mortgage. How does this financing work? The normal lenders that buyers would usually use look at the purchase price/appraisal, add on the cost of possible improvements that the buyer has proposed using builder and architectural plans. Florida Realtors describes the financing as being based off of the “improved value”.
Already own a home but still want funding to help improve it? You could still use a renovation mortgage to help finance it.
RE/MAX Paradise is dedicated to helping you find your dream home. If you do not see your idea of perfection in our listed properties, maybe a renovation mortgage can help you recreate one of these into your ideal home. Contact us today if you have any questions about this special financing!