As the economy continues to improve, it is still common to see home buyers purchase homes that were rundown. They could have been abandoned as a result of the numerous foreclosures that took place or they could be located in an area that was hit hard by the economy and has just gone downhill since then. Whatever the reason may be, people are purchasing these homes, not to flip them and make a profit, but to live in them. This is beneficial for the community as it helps to rehab the eyesores that could be bringing values in the community down, but it is also great for the people purchasing the home. Here are the top reasons to buy a fixer upper if you have the means to do so:
Get more home for your money.
If you want a big home, yet do not have the income and credit to qualify for a loan for a big home, this is one of the good reasons to buy a fixer upper. This type of home will be sold for less than the market value, allowing you to purchase the bigger home and possibly still have room in the loan to make certain repairs. The repairs to bring the home up to FHA code are going to be required, but any other repairs are optional, which means you don’t have to do them to purchase the home if there is not room in your budget to pay a mortgage of that size.
Buy into a neighborhood you might otherwise be unable to afford.
School districts, surrounding home values, and home size could impact the price of homes in certain neighborhoods. If you have had your eye on an influential neighborhood but know you could never afford the prices in there, keep an eye out for homes that need excessive work (short sales or foreclosures) and see if you can get approved for a 203K loan for the home, allowing you a way into the neighborhood.
You can create the home you desire without purchasing a brand new home that costs too much.
If you cannot afford to build a home from scratch, purchasing a fixer upper with a 203K loan is the next best thing as you can add as many rehab options as fit into your loan. If you qualify for a decent size loan, you could completely change the structure of the home, making it exactly what you want without having to come up with large sums of money.
You can make energy efficient changes without spending a lot of money out of pocket.
In the end, these changes will end up saving you money as the longer you live in the home, the more money you will save on utilities. Depending on the type of repairs you make, you may even be able to deduct the repairs on your income taxes, saving you even more money in the long run.
If you are considering purchasing a fixer upper but are worried about the work that it will involve, you can be rest assured that the 203K loan helps to walk you through everything. With a qualified loan consultant by your side, you can get the repairs and remodeling done on your home without many headaches. In the end, you are left with a home you love in an area that you may have always desired to live. It is a win-win situation for you and the community. Make sure to find qualified professionals to handle the loan in order to ensure its success!
Justin McHood is America's Mortgage Commentator and has been providing expert mortgage analysis for over 10 years.
