The First-Time Homebuyer’s Guide to Purchasing a Fixer-Upper
The First-Time Homebuyer’s Guide
to Purchasing a Fixer-Upper
If you’re thinking about buying a fixer-upper as your first home, there are several different things you’ll need to consider before making the purchase. For instance, you’ll need to determine whether you have enough money saved for any potential repairs that will be needed in the future, and you’ll need to decide if you’re going to stay in the home or sell it once you’re done renovating it. To learn more about these considerations you’ll need to make, read on!
Is a Fixer-Upper Right for You?
According to CNBC, approximately 68 percent of millennials aged 18- to- 34 are open to the idea of purchasing a fixer-upper as their first home—largely due to the lack of affordable homes available. However, fixer-uppers aren’t as affordable as homebuyers may think—as the average homeowner spends around $43,000 in remodeling expenses. Depending on the age and condition of the home and whether major repairs will be needed down the road, this cost could be much higher.
When you’re buying an older home or a poorly maintained property, for instance, you could run into plumbing, electrical, roofing, or structural issues much more quickly than you would if you were purchasing a newer property. As such, you’ll need to budget for potential home repairs and upkeep costs before making your purchase. Millionacres recommends setting aside 1 to 3 percent of your home’s purchase price each year to cover general upkeep costs, but you may need an additional emergency savings fund to cover any major repairs that could also be needed.
If your goal is to live there temporarily in hopes of turning a profit, talk to your realtor first. They can give you a better idea of what the renovated home might sell for. This can help you better plan your budget and decide if it’s better to stay put for a while or move forward with your flipping plans.
Financing Your Fixer-Upper
To assist you in financing the purchase of your new home and the various improvements you plan to make, several mortgage options will be available to you. While the type of mortgage you’ll qualify for will depend on your down payment amount, credit score, and whether you’re a former service member, several renovation loans include:
FHA 203(k) loans
VA home loans
HomeStyle loans under Fannie Mae
CHOICERenovation Mortgages under Freddie Mac
To learn more about your financing options and how to qualify, meet with a trusted mortgage lender in your area. Your mortgage lender can help you to explore your options and determine whether a renovation loan will be the right type of financing for you.
The Exciting Part: Finding & Renovating Your Home
After securing financing for your fixer-upper and saving up for any major repairs that may be needed in the future, it’s time to search for your first home. As you search for homes, however, note that the right fixer-upper for you will depend on your budget, skill set, and whether you plan to complete the renovations on your own or hire a professional contractor to do the work. If you plan to sell the home after renovating it, you’ll also want to look for flip-worthy properties.
After finding the right fixer-upper, you’ll need to think about the different types of renovations and improvements you’d like to make to your new home. For instance, some cosmetic fixes may include things like replacing the flooring, painting the walls, and installing new countertops in the kitchen and bathrooms.
When installing new countertops, you can choose from a variety of materials such as recycled glass, laminate, marble, wood, and quartz. Many attractive materials are available to choose from, but quartz remains a desirable option due to its durability and stylish appearance. According to HomeAdvisor, the cost of installing new quartz countertops ranges between $1,000 and $5,000—as the contractor you hire will need to level the cabinets and add supports where they’re needed. Additionally, your contractor will need to fabricate the countertops and use an epoxy to carefully join the seams. However, your project costs will depend on the quality of the quartz you use and the number of materials needed.
After renovating your fixer-upper, you’ll need to determine whether you’re going to live there and enjoy your newly renovated home—or sell it for profit. After putting all that hard work into the purchase of your first home, however, no one will blame you if you’d rather live there and experience the many wonderful benefits of homeownership.
Thanks to Natalie Jones or Homeownerbliss.info … a first-time home buyer!
Carol Gilles of the RealEstate Group, has been helping her clients finding THEIR perfect home since 1979. Contact Carol whether you are moving across the street or across the state. She can be reached at 310-864-9738 or Carol@CarolGilles.com