The Pros and Cons of Buying a Fixer-Upper Home
Buying a fixer-upper has become a trend in recent years for investors and first-time homebuyers who cannot find or perhaps cannot afford turnkey homes. However, for those deciding on buying a fixer-upper, the question often becomes, “Is investing in a fixer-upper more of a hassle than it’s worth?” Here are some pros and cons of buying a fixer-upper and a few ways you can get financial support to cover the repair costs.
Advantages of a Fixer-Upper
- More affordable – One of the main benefits of a fixer-upper property is that it can be a cheaper option. Saving up for a down payment for a new home can be difficult for most first-time buyers. A lower sales price equals a lower down payment.
- Wider choice of location – The area where you purchase your house is as essential as the house itself. A fixer-upper property can help you acquire a home in an otherwise unaffordable locale.
- Chance to add value – A home renovation can add value to your property. Once you buy a fixer-upper and finish the upgrades, you are automatically adding value to the house. You can even sell it for a higher price when you decide to move again.
- Opportunity for personalization – Renovations for your home give you a chance to customize specific areas to your own liking. This is often difficult for move-in ready homes.
Disadvantages of a Fixer-Upper
- Renovations can be pricey – As a buyer, you should remember that, although you’re buying the home for a low amount, the labor and renovation costs can rack up. Always have some money saved as a contingency in case your renovations go over budget.
- Renovations can be unpredictable – It can be risky to buy a home that needs renovations. For instance, you may discover underlying damage or find that the house needs more work than you originally anticipated. Such additional work can prolong renovations and skyrocket costs.
- You can end up paying for two homes – Home renovations have a reputation for taking longer than initially estimated. Oftentimes, timetables are pushed back, which forces many homeowners to obtain a rental home while repairs are being completed.
- It can be time consuming – A fixer-upper is a long-term commitment that often involves a long list of improvements, which can take a lot of your time and patience.
Fixer-Upper Loan Options
A fixer-upper can indeed become costly. Depending on the type of renovations you intend to make — either by yourself or through a third-party contractor — you may not only see your free time being eaten up, but your money as well. Fortunately, there are several loan options to help you finance your purchase of a fixer-upper. Here are some loan programs that are designed to help out those in your exact situation.
- Freddie Mac’s CHOICERenovation® Loan
- Fannie Mae Homestyle® Renovation Loan
- HUD’s FHA 203(k) Loan
- VA Renovation Loan
Get Fixed up With a Loan at Butler Mortgage
Whether you’re buying a new home or a fixer-upper, Butler Mortgage can provide you with a loan that works for your budget or see if you qualify for a renovation loan to help you cover the costs of your repairs. Call us today at 407-931-3800 or fill out our free consultation form online and let us find the best loan solution for you.