Buying a fixer-upper can be easy if you work with the right team. According to noted penny pincher Dave Ramsey, if you’re in the market for a fixer-upper, chances are your competition is slim. That’s great news because it means the odds for scoring a sweet deal are in your favor. The current real estate market is really hot. Great homes that are move-in ready are going super fast, often for over asking price. So how do you go about getting a “sweet deal”? A home improvement purchase loan or renovation home loan is the answer.
With a home improvement purchase loan, you can buy the home in the perfect school district or neighborhood and make it into the dream home you want. Foundation issues are a big problem in the Dallas and Fort Worth area and these homes cannot be financed in a traditional way, but a home improvement purchase loan solves that problem. This means that you will have less competition for the home and you can buy it for a discount by using a home improvement purchase loan.
Request your Free How To Buy A Fixer-Upper with a Renovation Loan ebook now:
• Submission of income, asset and other documentation needed to complete the submission and approval of your mortgage loan. (It is best to provide this information at pre-qualification)
• Find the neighborhood you want to live in. If you don’t have a Realtor, we can refer you one familiar with the loan process and finding a good fixer-upper.
• Choose a home listed for sale that has the most potential to be what you want. It may be the house in the worse condition and most likely the lowest price in the neighborhood. This is the perfect fixer-upper! It can even be listed for sale “As Is” or “Cash Only”.
• Call Richard’s team so his team will coordinate with your designer or contractor to help you decide what you want to be done and the estimated cost. We even have a list of pre-approved contractors that can help you.
• Sign a purchase contract (allowing 30-45 days for closing).
• Request and receive bids from contractors for the renovation work needed and submit to the renovation specialist. The HUD Consultant will coordinate a meeting at the property with you to review what needs to be done and help with the contractor bid process.
• The renovation specialist will validate the credentials of contractors you select, and the bids submitted.
• The appraisal is ordered to determine what the after improved value will be, the loan is submitted to underwriting for approval.
• The mortgage loan is closed according to the schedule on the purchase contract.
• An interest-bearing, renovation escrow account is set up for your renovation.
• Renovation work can begin immediately after closing.
• After closing the work must begin within 30 days of closing and be completed on the pre-determined schedule established prior to closing. The sooner the project is complete the better for everyone involved.
• As the contractor completes each phase of work, a draw payment can be paid for the completed work. The HUD Consultant prepares a draw request based on the contractors billing. You approve the draw by signing it and submit it to our renovation specialist. Within 10 days the contractor receives payment. Ten percent (10%) of each payment is held back to protect you in the event the contractor does not fulfill the contracted obligation.
• Upon completion of the project, the HUD Consultant conducts a final inspection and draw request.
• You confirm the project is complete and that you are satisfied with the work performed.
• Our renovation specialist closes out the renovation escrow account and if there are any funds remaining in the account, applies the remainder to the principal mortgage balance.
• The contractor is paid the 10% retained and obtain a final lien release.
• A final title search is also ordered to confirm that the property is free and clear of mechanics or material liens.
• The process is complete.
Helping buyers and sellers with the Home Improvement or Renovation Mortgage is the smart way to buy and sell. I offer the FHA 203K, Homestyle Renovation, VA renovation and Jumbo Renovation home loans. I have a team that is dedicated to this process and we make dream home buyers every day. I can help you too. Start your home improvement loan process now.