A Renovation Loan Might Be the Key to Affording Your Dream Home
Sponsored Considering the current high prices of the housing market, buying a move-in ready home may not be the affordable option. Renovating a fixer-upper may be your best solution.
Whether it’s changes to a current home or updating a newly bought fixer-upper, more people are finding their dream homes through renovation.
Going with renovation lets you buy a larger or better located fixer-upper than you could afford as a move-in ready home; it boosts resale value for a smarter long-term investment; you can invest in upgrades that will pay -off over time, such as energy-efficiency. But the most important benefit is it helps you better enjoy the space you’re in because it suits you better.
Listen to yourself
“What’s important to you in your ideal home?” asks Craig Webb, editor-in-chief of Remodeling and ProSales magazines, who wants you to ask yourself these questions before getting into a renovation project. “Are we talking about improving your living situation, or are we talking about making more money when you sell?”
Craig advises that what’s “cool” in housing trends changes so frequently that “if you’re going to live in the house for at least five years after the remodel, don’t worry about the [resale] value you’re adding.” In cases like this, think about cost rather than value.
Stick with professionals
Unfortunately, a successful renovation isn’t as easy as it looks on home improvement shows. “There are few things in life as complicated and traumatic as home remodeling,” Craig warns. “There’s plastic over everything. You can’t find anything in its normal place.”
Seeking professionals to handle your work — as opposed to doing it yourself — can save your sanity. Before hiring your team, consider the following:
- Calculate the cost of your dream changes ahead of time
- Pick what you can afford (with some cushion money set aside for the unforeseeable)
- Select professionals with a proven history (more than a year is ideal).
Looking at reports of “cost versus value” — such as the one put out by Craig — will be invaluable in calculating the cost of each additions and upgrades depending on your location, as well as the resale value it could add.
“Renovating a kitchen, updating bathrooms or adding additional square footage are the kind of projects that offer the biggest impact in both adding value and improving your quality of life,” says Brad McMullen, vice president of renovation lending at PrimeLending.
Weigh your financial options
Having so much to plan and pay for can be daunting, but it doesn’t have to be. Connecting with a professional renovation lender can help you set a budget and start your renovation project off on the right foot.
Know your financial options — how much can you borrow and what will your renovated home appraise for? — and speak to a pro as soon as possible. “There are many loans options available,” says Brad. “We base your loan amount on the cost of planned repairs. If you’re knocking down the wall between the dining room and kitchen, that’s one loan. But if it’s a load-bearing wall, that’s another.”
Spanning from $500 for a broken water heater to a $2 million home addition, PrimeLending offers a rainbow of renovation loan options in all 50 states. Options for if your credit isn’t great, if you’re a military veteran or if you want to roll your renovation costs into your mortgage for a single payment. These options simplify your finances and save you money — along with the invaluable expertise that will guide you through remodeling’s many “surprises” and across the finish line.