Sometimes your perfect house doesn't start out so perfect. For those who can see the charm of an old home and envision its beauty after a remodel, buying a fixer-upper might be the perfect fit for you. However, the ease and simplicity of a remodel as seen on TV is rarely a reality.
Here are a few things to consider before making an offer on that old charmer.
Get a home inspection done
A fixer-upper is obviously going to have things that you can see need work. But sometimes it's what you can't see that leads to the real problems. It’s important that you hire a good inspector who will be able to find those things that maybe aren’t as obvious to prospective buyers. Issues with electrical, plumbing, foundation and other damaged areas can be hard to see if you don't know what you're looking for — and can be very expensive to fix or replace if left unattended. Get a thorough home inspection before getting in over your head.
Get quotes from professionals
From realtors and architects to contractors and designers, assemble a team that you trust and that understand your vision for the house. Get multiple quotes and ask for referrals from people you trust. According to Angie's List, this will help you best understand what it's going to take to make your home what you want and will allow you to plan on what it's going to take financially. A remodel can get expensive fast. Having multiple quotes can help prevent some sticker shock and give you a sense of what's a good deal, what's on the upper end and what's a little too good to be true.
Have a plan
Accept that you may not be able to do everything at once. Prioritize what is a must and what can wait. Identify things you might be able to do yourself.
One very important aspect of remodeling to consider is where you will be living during construction. Will it be in your parent's basement? Will you rent an apartment? Will it be in the house while under construction? Know going into it that if you plan on living in a house under construction it will be stressful. Make a plan on how you will handle things like not having a kitchen, bathroom, etc.
Get the right financing
Planning on how to finance a remodel can be tricky, says Nerd Wallet. While most lenders would require you to acquire a second mortgage or home equity line of credit to finance the remodel, there are some lenders who have special loan products specifically created for homes that need a renovation or remodel.
The Equitable Bank offers a renovation mortgage that allows you to purchase or refinance a home in need of repairs—up to 95 percent of the loan-to-value of the appraised value at completion. No need for a second mortgage. Save yourself money and time and go there first to get the best financing you can for your remodel project. Plus, mortgage rates are still relatively low, but they're forecasted to rise later in the year. Locking that rate in now could save you thousands of dollars in the years to come.
For more information about home buying, building and remodeling or for today’s lowest mortgage rates go to The Equitable Bank.