Purchasing a house that requires updates or renovations might seem like a daunting and expensive task, but there are resources available and tricks that can help you out financially. If you are currently looking to buy a new home in a more expensive neighborhood or area, consider purchasing property that might need a little work.
Finding the right house
Let your real estate agent know what you are looking for and consider opening up to the idea of purchasing property that might require a little more work. Ultimately you may come out with the home of your dreams in your favorite location.
Search for a home that fits your budget and gives you some wiggle room to play with money for renovations. Make sure that you have a home inspection done by a professional to ensure you invest in a property that does not posses any issues you are not aware of before moving forward with your purchase.
The Department of Housing and Urban Development has a variety of loan programs that you can use to fund a renovation.
One of the loans that HUD offers is a Title I Home and Property Improvement loan. This is used to help with home remodeling projects. With a Title I loan, HUD will insure a loan from a private lender and allow you to gain access to money for the further improvement of your home. In addition, your renovations can add value to your existing property. You can easily find Title I lenders around your area by looking at HUD's website.
HUD can insure a single-family house improvement loan as large as $25,000. There are some requirements needed to qualify for a Title I Home and Property Improvement loan. The construction of the home must have been completed for at least 90 days and someone should also have been living in the residence during the 90 days after the building is completed. In addition, the loan will only be provided when the deed of property or proof of mortgage is presented. A good credit score and steady source of income are also required.
A 203(K) Rehab Mortgage Loan is another potential option that may be appealing. The Federal Housing Administration provides this loan to repair a single family property or real estate that has up to four living units. You can use this loan to convert a multi-unit building to a single-family or vice versa. Qualifications require that the building have been built and completed for at least a year.
Another loan that can be used to renovate your home is a PowerSaver Pilot 203(k) Mortgage. Qualifying for this loan requires you as a homeowner to incorporate energy-efficient appliances and features in your renovation, according to the FHA. The inclusion of energy-efficient appliances can boost the overall value of your home as well.
Money-saving techniques for your renovation
Remodeling your home can be expensive and inconvenient. However, you can keep costs and your stress level low by planning ahead. Organize all of your projects in order from most important to least important. Know where you want to splurge and where you want to save. Consider necessary renovations, like roof repairs, and which rooms you will be spending a majority of your time on when deciding which projects are most and least important.
You may also want to think about which improvements will add the most value to your home. This is especially important if you are planning on moving again in the future. According to HGTV, updated bathrooms and kitchens provide the most substantial return on investment. These rooms are likely the most appealing renovations you can complete to increase the sticker price of your property.
The materials and features you use in your renovation do not always have to be the most expensive items. Consider discussing options with your contractor before purchasing supplies. This Old House suggested asking about extra supplies the contractor has to save a few pennies. In addition, purchasing imitation materials might also alleviate the total cost of remodeling. Flooring and countertops are two examples of materials that are less expensive while still providing the look of pricier materials.
Do it yourself
Do not be afraid to tackle some of the remodeling projects yourself. Select tasks you know you can easily do without much expertise. For example, do any painting jobs on your own or complete some of the demolition before installing new features.
Before doing any remodeling on your own, make sure you are confident and comfortable with the job. You will want to know whether there are any risks present as well. If you are demolishing a wall, first ensure that the wall is not used to support the structural integrity of the home, and that no electrical work is damaged in the process.