My wife and I are buying our first home soon, I am adamently against moving into a home with an HOA for various reasons and this leaves me with mostly older homes in the non-HOA areas. Inventory in this area is at an all time low (as most of the country). My wife and I are open to doing cosmetic work (paint and floors) but we had originally been thinking that we would do what we would could when we moved in but we would tackle things over time, ideally not taking out additional loans.
My realtor has sent me a couple of places which are ~$145k under our budget but need quite a bit of work. It is really difficult to say how much work before an inspection and use looking at the house physically but certainly more than we were originally thinking. The wheels did start turning, my lender offers the HomeStyle Renovation loans.
If we took advantage of the HomeStyle loan we would have a single payment, at this point I am just trying to weigh all my options. It would allow us to potentially purchase fixer-upper and do all the work we want. In theory we could go month to month our apartment lease and there isn't a huge rush so I want to consider the option.
I spoke to the lender, and I have been doing some research. I have a pretty good understanding of the process. I am curious though if anyone has any experience with these types of loans. I feel like in a hot market having a longer closing process and the delays that would come from needing to get contractors plans and all the approvals that we would be at a disadvantage. These fixer-upper houses are very likely to get bought up my investors who are paying with cash.
It doesn't seem like we would have a lot of time to get bids from different contractors either.
I think I have talked myself out of going this route and just hoping we can find a home that doesn't need too much immediate work that we couldn't pay for up front but I thought I would ask the peanut gallery and maybe some of the lenders on here have experience. My LO seemed to be wanting to talk me out of it as well, maybe because it is a pain for them.
@Anonymous wrote:Following for the stories. I just went under contract and will be financing using a homestyle loan.
I suppose I can talk to my realtor about this, but do you pick your contractor and get bids before or after it goes under contract?
@Anonymous wrote:
@sxa001 wrote:
@Anonymous wrote:Following for the stories. I just went under contract and will be financing using a homestyle loan.
I suppose I can talk to my realtor about this, but do you pick your contractor and get bids before or after it goes under contract?
No but I already had an architect from a previous home I made an offer on and walked away from and he has a network for general contractors. I went under contract yesterday and the architect and general contractor did an initial walkthrough today. My lender said I would need to get a detailed bid to him by the end of next week to close by December 31st.
Wow! That is a fast turn around, my lender said Homestyle loans are usually 60-90 days, versus 30 days on the traditional conventional. But maybe he is including time to get bids and such. I don't know any contractors but I have friends who have done extensive remodels both on their own homes and rentals so in theory I could just use one of their people and probably streamline things.
For me though, this option is kind of a backup option if I don't find anything live-in ready. If the place doesn't need any immediate work we will stick to our original plan and do any cosmetic work over time and anything bigger that we would want down later on down the road we could save for and not take on additional loans.