How do I Repair / Remodel recently purchased Home?
Bobby K asked:
Last year, I bought a small home on a couple lots. Estimated value was $5000 more than I paid for it. Only been paying for a year so not much “Equity” in it, but I’ve discovered that it needs quite a bit of work. How do I go about getting financing for a remodel/repair?
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You’ll start the same way you qualified for a home loan; 3 years tax returns, pay stubs, etc. Then you’ll have to have quotes from contractors to take to the lender describing what you want to do and the cost. If it’s a larger project, your lender may require plans, also. [who]
I don’t think you will these days. You might consider selling one of the lots and using the proceeds. Repairs do not increase the value like an addition would – but again, with a down market the addition would most likely be a break even and not an improvement. Check with your banker, before you take my word for it. [who]
First and foremost, know what you are getting into, make a list of the serious things that need to happen to your home first. Do you need foundation? Flooring or Beam Supports?, Water pipes? Do you need a new heating and cooling unit etc? Do you need to gut the bathrooms or kitchen?
The list will be pretty big, but you want to get the big things repaired first.
On your sheet of paper write “need” and “wants”.
Now that you know what you need – price out a few of the items, see if you buy from the same retailer if they will give you a 10% break on your purchases. Find the figures that are close to what you feel you can make monthly payments on, then write up your proposal.
Check around locally with your bank, or credit union and even check online with E-loan. Things are really shaky right now and though we’re sliding into the red, there still are places willing to give you what you need.
Hope this helps! [who]
Right now they’re rewriting a lot of mortgages.
Take advantage of it.
This 4% fixed rate won’t last.
Probably reduce your paymernts too. [who]
Try to take out home equity from the existing loan and put it towards your repairs.
[who]