For the past two years we have seen several homes fall into hardship. Homeowner's are foreclosed on or simply cannot find the funds they need to repair them due to the economical strain on their budgets. The good news is with the federal stimulus funding for first time home buyers and the lower interest rates for the rest of us, these homes are finally getting the attention they need.
The following "ah" and tips can come in handy whether you are purchasing a distressed property or own a home that simply needs to be refreshed. In either situation try to think about being green by also updating your kitchen appliances, heating and cooling system or improving water efficiencies with low-flow showerheads, toilets and faucet replacements.
1. Is the property in such disrepair that total tear down or stripped to the skeleton needs to be considered? If so, you may want to check with your mortgage company to see what (if any) restrictions apply. They did finance what was originally there so they may have specific requirements in mind. They also may offer a Renovation funding program (more on this shortly).
2.Is your home historic or at an age where special renovation funds may be available? Check with your city to see if they offer such programs. Depending on age of the home, historical importance, or style some may be eligible through state or federal programs.
3.Check with your city building department. What are their requirements for either demolition and rebuild or remodeling on a massive scale? Massive remodeling to most is when a property owner basically strips the home down to foundation or its basic framing members.
Depending on your desired outcome and how long you plan to own the property one option may be more favorable to you over the other. For example, we removed some interior walls of a 1970's home and then exchanged a 3-season porch on the back with a new porch on the front. The benefit to this was the building permit cost and property tax savings because we technically did not add a new addition to the home but rather exchange one space for another. The disadvantage to this is for future resale of the home we still have to list the home as a 1970's structure with 1990's total updates.
4.Do your homework.Understand what is happening in your community. How are the home values today? How many are for sale, sold, pending? Are the properties being maintained? Is the city making plans to change traffic patterns, building retail or commercial nearby and are these improvements good or bad for this home and its property? Understanding the impact of the homes surroundings will give you a better indicator as to whether or not a total rebuild or extensive remodel is warranted. Maybe it is a simple remodel to bring the home back into condition and market value of the neighborhood as it exists today.
Besides the Federal Incentive for 1st Time Home Buyers, many mortgages are offered at great rates. If you are buying one of these properties that needs some TLC ask about a Renovation Program. Wells Fargo Home Mortgage for example offers such programs that are a perfect fit to these types of properties that need some attention.
The Purchase & Renovate Program by Wells Fargo for example is designed for you to buy that home that still needs improvements. What is great about this program is that you can buy the property and do the renovation funding all within just one loan.
The benefit of this is several key points. 1) The money you borrow is based on the increase value of the home AFTER the improvements are made. 2) Typically the renovations are spread throughout the loan term so your payments are lower. 3) Both the mortgage and renovation costs are together in this loan so both may be tax deductible. Versus if you would have used a Lowe's or Home Depot Consumer Credit Card where you pay higher interest rates and cannot submit for possible tax deductions. 4) You have the added benefit of closing on the one loan and just digging into your project, no waiting or searching for the funding to start that dream bath or kitchen.
Another product that Wells Fargo Home Mortgage Offers is the Refinance & Renovate Program. Similar to the Purchase & Renovate it is for those of us that already own our homes and need to make the improvements. Again, they base the loan on the increased value of the home AFTER the improvements are made. Some homeowners who very little equity in their homes and plan to move within 1-5 years like this as well because they can make the necessary repairs . With the repairs made - their home may fair better on the traditional real estate market and sell more quickly, especially to home buyers that do not have an eye for restoration.
While this article mentions the Well Fargo Home Mortgage products there are several others out there so do your research.
Just think, we take part in this renovation or simple updating we all benefit. We keep the lumber yards busy, the hardware stores, plumbers, electricians, heating and cooling, painters and on and on. Learn more about housing see our blog at: http://truehousing.blogspot.com.
Article Source: http://EzineArticles.com/?expert=Kimberly_Streich
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