Purchasing a home can be a major life event, especially if you plan on renovating the home after you purchase it. There are licensed real estate professionals here at 54 Realty Group who are ready to help clients to purchase a Tampa Bay home with the intent to renovate, remodel, update, or change what they don’t like (after they move in the home).
To many home buyers in the Tampa area, renovations being made after closing costs sounds really pricey. That is not always the case. In fact, you may be able to get a better deal by renovating a neglected home. There are quite a few lenders who will allow borrowers to purchase a house and renovate it under just one loan. This saves the buyer both time and money, while increasing the final renovated value of the home.
Two great options that buyers may be provided are the FHA 203K and Fannie Mae’s Home Style loans. It provides the home buyer, convenience, home buying and renovation in one lump sum. Lenders will calculate the amount of the loan by figuring the purchase price, appraisal, and the planned improvements. The will use the building cost estimates or the architectural plans to help them determine the whole value of the home after the improvements are made. Your loan financing will be based solely on the “after” improved value of the home.
FHA 203K Renovation Loans
FHA 203(k) renovation loans are a type of insured mortgage (aimed at the owner-occupied home shopper) that covers the purchase and renovation (or the refinancing of and renovation) of a house or other residence that is at least one year or more in age. Some of the loan is used to pay the sellers at closing (or pay the existing mortgage) and the rest of the loan is placed in escrow and then released as the renovation is completed. Eligible renovations vary from slight improvement face-lifts to a complete reconstruction of the property. The cost of renovation must be at least $5,000 up to an amount determined by the lender. As long as the foundation remains, the entire structure may be reconstructed if necessary.
Fannie Mae’s Home Style loans
A Homestyle mortgage through Fannie Mae allows buyers to make repairs, improvements, or property renovations that do not exceed 50% of the “after” renovation value of the home. With this mortgage, buyers can avoid the need for a second mortgage or home equity line of credit (HELOC). This type of mortgage is available to investors as well as home buyers. This loan also allows for luxury items or upgrades that the FHA 203k may not. If you are looking to add your dream pool to the perfect property, then this loan may be your best bet!
First time home buyers can hit a real bargain of a deal if they combine a renovation loan and mortgage. It is a great use of renovation financing when you remodel that fixer-upper with an all-in-one loan. A once-ugly house can surely be turned into a beautiful neighborhood gem. If you want to own a home and also want to give it a face-lift or new modern day look, then you can make use of renovation financing to make improvements to your new home. These types of loans are designed to benefit the home buyer by saving them much valuable time and money in the loan process.
If you are interested in information on fixer-upper homes for sale in Tampa, or any real estate in the Tampa Bay area, please contact Rose & Joe LoCicero at (813) 435-5411 or start your home search now.