Mortgage Loan Originator NMLS #165849,
Meredith Village Savings Bank
Turnkey homes come at a premium, and in a seller’s market many buyers often find themselves priced out of the home they want. While you might find watching your favorite home makeover celebrities rehash floor plans and restore character exciting on TV, the reality of purchasing a home that needs improvements can be daunting – especially when you’re selling a home or managing moving timelines too.
Why Should You Consider a Fixer Upper Home?
Buying a home that needs work isn’t for everyone, but there are some benefits to consider – the most significant being that it might get you into the neighborhood you want. Your proximity to the right schools, family and friends, jobs or activities you enjoy can impacts your long term happiness in a home.
You also pay extra for the convenience of move-in ready, so you might find you’re able to afford a larger home or that you have less competition during the buying process if you opt for a home that needs improvements. It’s also hard to quantify the beauty and character of a home that has some history and the pride you can take in putting your own stamp on it with your choice of finishes and fixtures.
Financing Your Improvements
Scale and scope are two important factors you’ll discuss with your lender when determining the type of loan you will need. Are you able to move into the home right away? Will you be able to stay in the home while construction takes place? How long can you wait before the improvements are made? These are all questions you will want to consider.
For large scale home makeovers, you will likely go through a traditional construction lending process. You’ll purchase your home and work with your contractors and the bank to complete all renovations. While many times construction loans require two separate closings, one at purchase and one at completion, at MVSB we offer the ability to complete both phases with a single closing, saving time and resources.
If it’s mostly cosmetic or smaller scale enhancements you hope to make right away, like a kitchen upgrade or finishing an unfinished room, you’ll likely use a rehabilitation loan. These loans have no fixed dollar amount and renovations can be completed within 120 days. There are just two disbursements during the renovation process, one to cover supplies and one for labor.
And if you’re already in the home you want, but it’s looking a little dated or not functioning the way you would like, consider a home improvement loan or taking advantage of the equity in your home with a Home Equity Loan or Line of Credit.
Choosing Your Lender
You don’t need to wait until you have found a home to talk to a lender. In fact, engaging a lender early in the process can help you gain a better understanding of what your financing options are and what you can afford. Choose a lender you feel comfortable with, and that takes the time to get to know you and your project goals. Working with a local lender has advantages, including a great understanding of special loan programs and resources that might benefit you.
MVSB does a great deal of construction lending in the area, so we stay well connected with reputable realtors, builders, and contractors to help guide you through the process. We also understand the unique challenges and advantages of building a home in a state with such geographic diversity, so we don’t shy away from ideas and plans that are outside the box. Our construction loan specialists shepherd clients through the construction and renovation process, even doing personal site visits to ensure the project stays on track and within budget.
Making Your Dreams Reality
Seeing the hidden potential in house that needs a little love and working closely with a renovation team, gives you the opportunity to stay involved throughout the process, and make your dream home a reality. Don’t be intimidated – you’ll find experts and resources as close as your local bank!
Meredith Village Savings Bank (MVSB) is a Member FDIC and Equal Housing Lender. NMLS#466022