There are all sorts of loans for all types of homes, including "fixer uppers". Lenders can offer attractive terms to buyers who want to renovate their purchase. One well-known lender offers three different types of renovation loans. The most popular requires a down payment of only five percent.
When applying, borrowers submit architectural drawings of the proposed improvements. A completed home value is determined and financing terms are offered, with interest rates usually coming in just above those on conventional loans.
Payments can be separated into six parts during the renovation, with disbursements issued at the completion of each stage of the project, similar to a construction loan. Some lenders will even roll the first six months of interest into the total loan amount, freeing you from making payments while you're heavily involved in your improvement project.
With so many financing options out there, start the discussion with a real estate agent who is experienced in matching homes to buyers and buyers to loans!
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