Learn how rehab loans can expand your buying options from Fairway’s Carrie Guarrero, who walks us through this home improvement loan that lets you borrow money to buy a home a renovate it.
As the local housing markets get tighter and tighter, today’s home-buyers get frustrated with their limited options. With a historical low inventory but with normal buying demand, people are finding it hard to purchase a home that’s right for them. But don’t lose hope yet because our friend, Carrie Guarrero of Fairway Independent Mortgage, welcomes us in her home to share a mortgage hack that could be your ticket to a home in that perfect neighborhood!
Rehab Loans: An Overlooked Option
With the recent low listings of real estate properties, home-buyers struggle to find the homes they desire. Submitting your offer for a house becomes The Hunger Games with forty other people doing the same thing. It seems like a hopeless case when you don’t have any other options left in the neighborhood you’ve always wanted to settle in.
Most home-buyers usually don’t consider buying a house in need of repairs or improvements. Carrie nudges us to the idea that perhaps they should. Apparently, there are these things called rehab mortgages, a type of home improvement loan, that can be used to buy a property that needs a little bit of work. What rehab loans do is that they let home buyers borrow enough to buy a home and pay for the renovations that the property needs.
With rehab loans, Carrie has helped her clients buy properties in neighborhoods that, otherwise, might have been out of their reach. Rehab loans will help you repair an “ugly” property and turn it into your dream home.
Speaking from Experience
Aside from being an expert on rehab loans, Carrie herself went through the similar homebuyer situation – before moving to Waterville, she lost out on a multiple offer situation with no other appealing option. In fact, her current home was an unlisted property at the time she was inquiring. She was viewing a house, was frustrated and happened to glance out the back window when she saw this Waterville property (now her home) and said, “If I could just get my hands on a house like that.” Fortunately, her agent knew the owner and they went over to ask if the owner was interested to sell. Carrie emphasizes on the importance of working with people who aren’t afraid and will go beyond to help you find a property that you can afford and can envision a future in.
It’s About Good Location and Good Structure
At the time she was asking the owners if they would think about selling, the house was a rental duplex unit for 15-20 years that wasn’t exactly cared for. It needed pretty much a whole lot of everything. However, in her mind, Carrie saw the house as what it used to be and what it could become.
It is difficult to imagine what to make of a dilapidated property or even a property that just needs cosmetic updates. If you’re having trouble seeing the big picture, focus on these things: Is the house in the right place? Does it have a good solid structure? If so, you can pretty much do anything with a rehab loan. Carrie recently worked with a couple who had that problem and upon taking Carrie’s advice, they ended up buying an older farmhouse with acreage through a rehab loan. They spent a little over $100,000 and turned it into the perfect property for them. Whether a home just needs some simple updates or a major overhaul a rehab loan may be the key to getting you what you want and need in a home today.
Some Tips When Considering a Rehab Mortgage
- Ask your realtor for market valuation. They can consider the current value of the property and the value post-rehab. Some can even give recommendations regarding the construction side. They usually have contacts with reputable contractors.
- Find one great general contractor to work with and enlist them to attend the home inspection with you. They can tell what improvements you can do and estimate the construction cost.
- Leave room for overruns. Overruns happen more in remodels because there’s always something that’s unknown. Have a contingency plan.
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