When it comes to fixer-uppers, yours is not the only opinion that counts. Some mortgage providers have limits on what they will allow their money to go toward. That’s because they want to make sure you are making a sound investment, instead of one that will drain all of your resources and leave you unable to meet your monthly payments. Instead of just jumping in head first, take a look at some of the things you need to consider before you invest in a property that needs immediate attention.
How Much Can You Do?
If you have to pay someone to do the majority of the work on a new house, it may not be worth it. Consider the fact that if you have to pay someone, and you have to buy all of the materials, you may as well just buy a home that has already been renovated. You may even be able to purchase a home that’s already been renovated for a better price than the fixer-upper will cost in the end, and you won’t have the headache and stress of waiting for the work to be done.
It is not just about your skills, either. Do you have the time to do the work? If you are working a lot of overtime, or you are in college and work full time, you may not have the time to do the work. Minor repairs on a room or two are one thing. If you have to overhaul the foundation, repair plumbing, or work on other serious elements of the house, you’re looking at a significant time commitment.
Can You Live in It While Performing the Renovations?
If you can live in the home while you work on it, time may not be a factor. You can just work on it room by room and deal with what you have in the meantime. However, when there are issues involving the electrical, mold, or serious repairs to the roof, you may not legally be able to live in the house until all repairs are done and inspected. Even if you could, it’s always better not to expose you and your family to potentially toxic environments, especially if you have kids.
Is the Neighborhood Worth It?
It’s one thing to buy a historical building in a neighborhood that is a welcoming place to live, but it is a whole other thing to buy a run-down house in a place full of other run down houses. What are you going to do once the house is finished? If you were planning to rent it out, will you be able to find a tenant who wants to live in the area? If you were going to live in it, would you feel comfortable letting your children play in the front yard? Some fixer uppers offer great opportunities, while others may have been abandoned because the entire neighborhood was going downhill. Make sure you’ve done your homework about a neighborhood before purchasing a fixer upper.
When it comes to approaching your mortgage company, you need to be able to demonstrate that this is a worthwhile investment for them, as well as yourself. When the math is done and the future is planned, does this house have the potential to be a decent investment of time and money? For more information on the process of purchasing a home that needs significant work, don’t hesitate to contact the mortgage brokers at Anmtg.com today at 773-305-LOAN (5626).
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