Buying and Improving a Home

Some prospective homeowners have home improvement needs even before they close on a property. Perhaps your dream house needs a few structural repairs to make it safe for your family to live in. Or, maybe you've found an older home that has great potential but needs your special touch. In many instances, it is easier to undertake remodeling projects before you move in or during the first few months of homeownership. This way you can work through the disruption and mess before you unpack all the boxes and get too comfortable in your new space. Before applying for a home improvement loan, decide whether the house you are considering is a solid investment. Is it in a neighborhood with stable or increasing property values? Will the improvements add value to the house, without resulting in an "over-improved" property in comparison to other properties in the neighborhood? Also, think about how much time the remodeling will take and how it will affect your lifestyle. Many lenders offer mortgage products that allow you to get one loan that includes funds for both buying the property and making improvements shortly after purchase. The amount you can borrow to purchase your home and finance improvements will usually be based on the purchase price, the value the planned improvements will add to your property, and your ability to repay the loan. Certain mortgage loans limit the total amount of renovations that may be financed. Therefore, before you start drawing up contracts or construction plans, you'll want to make some preliminary estimates of how much your planned improvements will cost and how much they will add to the value of your home. An experienced renovation lender can help you through this process and give you an idea of how large a loan you can afford and help you identify the appropriate loan for your situation.

For information and educational purposes only.