Buying a Fixer Upper and Taking out a Rehab or Renovation Loan.
Are you the fussy type? Do you like only a very particular type of home decor and style? If you have been searching for your dream home but to no avail, a fixer property which you can then renovate may be your best bet.
A renovation (or rehab) loan is also a great idea to help you purchase and renovate your home. The purchase price, as well as the renovation costs, of the home will be combined into one single mortgage. Your mortgage loan will then be closed in an “as-is” condition by using the home’s improved value.
A rehab loan, however, is not just for a home buyer. If you are already a home buyer, this type of loan enables you to refinance the house and to pay for any renovations or improvements that you wish to make. It should be noted that, depending on your bank or financing company, you are normally obliged to complete your home renovations or improvements within 6 months of taking ownership of the property.
When you take out a renovation loan, it can cover numerous home improvement aspects which include the following:
Improvements to decks, roofs, fencing and doors.
Adding on or improvement of exterior siding.
Replacement of windows.
Adding on of a second story.
Improvements to energy conservation, such as installation of sealing, insulation, solar panels and other energy efficient features.
Installation of new energy-efficient appliances.
Repairs to the foundations.
Interior and exterior painting.
Renovation of bathrooms and kitchens.
Knocking down of walls.
Modernization of HVAC, plumbing and/or electrical systems.
Garden landscaping such as planting of native plants and trees that could protect your house from wild fires.
Structural additions or alterations such as the inclusion of a garage.
Miscellaneous repairs and fees including permits, inspection, engineering, and architectural fees.
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