Buying a fixer upper
My wife and I have fallen in love with a property in a town we want and on a nice piece of land. It’s a fixer upper since it was owned by a woman who lived there for 10 years and wasn’t able to maintain the property the way it should have. Rugs and wallboard needs to be torn down, it needs a new roof as well. We checked the septic tank, well, and HVAC system and they are all in good shape so far. The home is in the market for $229k and has been on the market but no takers. We are hoping got bargain for $200k and take out a mortgage for $240k so that we’ll have $40k for closing costs and repairs. What are the chances of pulling this off? by parkes281 from El Dorado, California. Dec 28th 2021
Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,848 contributions
Rehab loans, which are specialized loans that allow you to finance repairs with the purchase of a home as you describe are available. The two main options are known as an FHA 203k loan, or a Fannie Mae HomeStyle loan. Under both of these, YOU are not allowed to do any of the work. It must be all done by contractors. I have more information on these loans at https://joemetzler.com/renovation/ - I only lend in MN WI IA SD and ND. Cambria mortgage, NMLS 274132
Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 2,431 contributions
If you are looking to do the work yourself, you are going to have to fund the repairs out of pocket or with unsecured financing from your local financial institution. However, I would suspect that there are many smaller contractors in your general area that could be instrumental in get the rehab work done. I've done a couple of these where the homeowner wanted to do things like paint the inside and outside, so this was left off of the rehab and they bough the paint with personal funds and did the painting, saving the $5 grand a painting contractor wanted. You will have to come to escrow with the down payment and all closing costs. There are no loans that allow you to roll these into the new loan.Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ Certified Mortgage Advisor and Certified by The National Association of Mortgage Professionals as a Certified Veterans Lending Specialist.Licensed in AZ, CA, GA, IL, MO, OR & WA... In fact, NEXA is licensed in all states except MA and NY so give us a call. ~ www.ApplyYes.com 480-889-9000 - OR - 480-695-9300
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