Buyers who see potential
Buying a fixer-upper
Learn how to choose the right renovation loan, line up contractors and understand draws before you make an offer.
Steps
- Is it a fixer-upper, or just dated?To a lender, a fixer-upper has safety or system problems, not dated finishes. Those must be fixed before closing or through a renovation loan.
- Renovation loans: buy and fix in one loanOne mortgage can cover the home and the repairs. Compare FHA 203(k), HomeStyle, CHOICERenovation, USDA and VA options by job size and limits.
- Contractors, bids and drawsA renovation loan needs a signed, itemized contractor bid before closing. After closing, repair money is paid out in draws as work is inspected.
- Inspections, and what to do with themA general inspection is the starting point. In Southwest Colorado, add tests for radon, wells, septic and wildfire risk, then use the results to negotiate.
- Appraisals and low valuesA home appraisal confirms the value supports your price, and your loan is based on the lower of the two. A low value still leaves you options.
- At the end: see it with your own numbersDaniel builds your Mortgage Plan: every option that fits, side by side, with your payment, cash to close and cost over time.