The current state of our market is not an easy obstacle for home buyers. There are some tricks however to help you be more successful.
Utilize a Mortgage Plus Improvement Option
If you are shopping with a tighter budget or don’t really have the funds to renovate your new home, using a mortgage plus improvements option can help you out big time!
How it works:
If you find a home in need of some TLC or repairs such as a new furnace, central air or roof, there is a way to have these things updated without using your saved cash. If your credit score is strong enough and you present the bank with the offer for your new home, along with a quote from a professional contractor or company for the work needed. The bank can approve your mortgage, as well as the renovations (usually up to 10% of the homes value).
Now heres the catch:
You will need to come up with the initial funds for the renovations, whether it’s from your savings, gifted from a relative, from a Line of Credit or Credit Card. This is only temporary because when the work is completed, the bank will reimburse you! Once you have been reimbursed, the amount will be added to the total cost of your mortgage.
Example:
You are looking at two houses on the market.
House #1 is all updated and is getting lots of interest from buyers. Your agent expects it will sell for around 350,000
House #2 is in need of repairs and doesn’t show well at all. However, it has tons of potential and does not have many buyers looking at it. Your agent expects the house will sell around 300,000 and you figure it needs about 20,000 in work. Once the work is done you believe the home can look as nice as house #1. When the work is complete the 20,000 would be rolled in your mortgage totalling a 320,000 purchase.
Be Smart Out There! Give us a call.
– Your Realtors For Life
