Until now, maybe you’ve been trying to find that “perfect” home — a kitchen that appeals to your inner gourmet chef or a spacious in-law suite. Search no further. All you really need is a house that has good bones and the potential to be whatever you want it to be. It’s not always easy to find the exact house that you are looking for in the price range you want. Nothing quite right seems to come up. What’s a buyer to do when there are no good options? Why not buy to renovate?
Look for a home that has good bones and the potential to be whatever you want it to be — No need to drain your savings.
With a renovation loan, the cost of repairs is included in the loan amount. Whether you want to gut the house and replace outdated electrical, or simply repair some of the gutters and downspouts, we can help you fund these updates without draining your savings.
Don’t let an old roof or outdated interior keep you from buying a home in the perfect location! Utilize the renovation loan and buy to renovate! Several mortgage companies will let you wrap the cost of the renovation into your mortgage by doing something called a renovation loan.
There are a few things to keep in mind.
The typical home purchase process can take about 30 days from contract to closing. A renovation loan usually closes in 45 days. Depending on the amount of work you need to do, you may not be moving in for a few months after you write the offer.
The interest rate on this type of loan is a little higher, but nothing compared to what an interest rate would be like on a personal loan or credit card if you funded renovations that way. There is a difference in the type of loan you will need depending on if renovations are structural or if they are cosmetic.
You’ll want to work closely with your REALTOR® to find a house that can use some fixing up and then determine an After Repair Value (ARV) for the house to make sure you aren’t over spending for the neighborhood. In a lot of cases, you may gain equity from doing the improvements.
It’s extremely important to work with a good contractor and someone you can trust. They must be a contractor familiar with the renovation loan process.
It’s really critical you get a good home inspector and even have your contractor see the home upfront so you can ensure the home has “good bones”, meaning that a house is structurally sound and can support different renovations that you want to do (whether that’s knocking down a wall or adding on an addition).
The renovation loans usually have a minimum and a maximum amount. Contact your local renovation specialist to see what those options are.
Loan programs may change at any time with or without notice. Information deemed reliable but not guaranteed. All loans subject to income verification, credit approval and property appraisal. Not a commitment to lend. Atlantic Bay Mortgage Group, L.L.C. NMLS #72043 (nmlsconsumeraccess.org) is an Equal Housing Lender. Located at 600 Lynnhaven Parkway Suite 203 Virginia Beach, VA 23452.
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