Buying A Fixer-Upper: Where to Begin as a First-Time Homebuyer

Fixer-upper, first time home buyers, buying a home repairing a home, rehab, rehabbing a home, home renovations

          By:  Natalie Jones

Where to Begin as a First-Time Homebuyer

Buying your first home can be nerve-racking, simply because there are so many new concepts to think about and details to consider. From securing financing to making sure the home is right for you, becoming a homeowner is a big job. When you add buying a fixer-upper into the mix, there are even more things to think about, such as finding the right choice in the best neighborhood and deciding whether to keep the house or flip it once the work is done.

However, there are some easy ways to get started with this process that won’t be too stressful. It’s important to put together a solid plan and to expect the unexpected. Don’t go into this thinking it will be smooth sailing because as with any new venture, there will be pitfalls along the way. The key is to be as prepared as possible and think ahead when it comes to your budget. Do some research on what type of work will need to be done on the home and get an idea of what the timeline will be and whether it’s DIY or requires a pro.

For more great tips on buying a fixer-upper, keep reading.

Set a Budget

A budget is necessary before you even begin looking for a home. Go over your finances and monthly expenses to get a feel for your assets. If you’ll be financing a mortgage, it helps to know the state guidelines for home loans, because there may be special funding for first-time homebuyers that don’t require a down payment, especially in rural areas. Talk about the budget with your spouse or partner and make sure you understand the total cost of buying a home — including taxes, closing costs, and moving fees.

Mortgage Details

There’s a lot to keep in mind when applying for home loans besides your credit score and how much you can afford for a monthly payment. The array of loans can be dizzying, so look to your realtor to help you zero in on the best option for you and the home you’re looking at. For example:

 

  • Conventional loan: Conventional mortgages are great for first-time homebuyers in that they cost less than many government programs that require mortgage insurance, you can also choose a fixed-rate or adjustable rate mortgage, and there are several options for down payments. Keep in mind that if the home you want needs serious renovation, you may be less likely to be approved for a conventional loan.

  • VA loan: If you or your partner served in the military, you’re eligible for a VA loan. These loans are ideal for people with less-than-excellent credit who can afford a mortgage but not a down payment. In addition, there’s no requirement for private mortgage insurance.

  • FHA 203(k) mortgage: Commonly referred to as a fixer-upper loan, an FHA 203(k) mortgage is perfect for homes that need major renovations as it allows borrowers the opportunity to access funding for home and renovations, as long as the repairs increase the appraised value.

 

This just scratches the surface of the numerous other loans you may qualify for, so it’s important to review everything that’s available to you.

Open Your Mind

When looking for a home, you need to know how to spot a gem that looks a little rusty on the outside but will spruce up nicely. For a lot of homebuyers, aesthetic problems can lead them to turn away too quickly, but this is to your advantage! Having a good eye for easy fixes will help you snatch up the best home at the best price.

 Make Sure You Have the Right Tools

Most home buyers look for ways they can make updates and repairs themselves, rather than hiring a contractor, which can put a big dent in the budget and add to the timeline. If you’re handy and think you can handle tackling some of the fixes yourself, make sure you have the right tools. Jigsaws, drills, and sanders are some of the most common tools for home repairs jobs. Keep in mind that big jobs, such as plumbing or wiring issues, should always be left to the pros.

Buying a fixer-upper can come with a lot of stress and anxiety if you’re not prepared, so it’s important to start with a good plan and to be educated about the entire process, from buying to fixing to potentially selling. Once you have an idea of where you want to begin, stay organized to reduce stress and keep everyone on the same page.

 

 Natalie Jones       https://homeownerbliss.info/   natalie_jones@homeownerbliss.info

 

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Buying A Fixer-Upper:  Where to Begin as a First-Time Homebuyer

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