There are all sorts of loans for all types of homes, and “fixer uppers” are no exception. Lenders can offer attractive terms to buyers who want to renovate their purchase. One well-known lender offers three different types of renovation loans, with the most popular requiring a downpayment of only five percent.So how does it work? Along with their application, borrowers submit architectural drawings of the proposed improvements. Then a completed home value is determined and financing terms are offered, with interest rates usually coming in just slightly higher than those on conventional loans.
Payments are often separated into six parts during the renovation, with disbursements issued at the satisfactory completion of each stage of the project. If you’re familiar with construction loans, you’ll find that it works in a similar fashion.
What’s really attractive about purchase-plus-renovation loans is that some lenders will even roll the first six months of interest into the total loan amount. That can free you from making payments during those first six months while you’re heavily involved in your improvement project and may even need to be living elsewhere.
In any case, there is a dizzying array of financing options out there, and it’s best to start the discussion with a real estate agent who is well versed in matching homes to buyers and buyers to loans!
Categories: Bennington VT, Selling