Buying a home in Charlotte that may need a little work presents a unique opportunity, especially for first-time home buyers. However, these fixer-upper properties also present unique challenges.
Today, I’d like to address a few things to consider when purchasing these homes. If a home is perfect for you and your family outside of a few minor details, don’t count it out just yet. There are loans out there that are specifically designed for home rehab projects.
Imagine this: You go out and find a near-perfect home that needs some work. If the home appraises for a value that would cover the costs of needed improvements, you can buy the property with a rehab loan.
Let’s say the home is priced at $250,000 and making your desired changes would bring its value up to $275,000. In this case, you’d want the home to appraise for $275,000, leaving you with a $25,000 budget. Before getting the home under contract, make sure to have a contractor come in and provide some estimates.
With the right wherewithal and a little bit of extra time, changing a fixer-upper into your dream home is possible.
These quotes allow you to make sure the deal is feasible for the home and the neighborhood. When you do go under contract, you would do so in this case for $250,000. Getting the lender to approve the loan will cost a little more than in typical circumstances, but it will allow the process to go smoothly. Once you go to closing, you will get some of the money. The contractor will also come out and complete the work.
But let’s say you don’t spend the total $25,000 you allowed yourself in this scenario. Leftover funds will typically go back toward your principal and interest. With the right wherewithal and a little bit of extra time, changing a fixer-upper into your dream home is possible.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.