Well, you’ve gotten a new house or need to fix up an old one. You don’t have the money offhand but you’ve tried everything to get some. No need to fear as the option for a rehab loan has lightened up a bit and if you qualify then you’ll be good to go. We’ll take a look at when, why, and what you should do regarding this kind of option.
First of all, rehab means rehab. It doesn’t mean borrow money and go on a vacation to Las Vegas. It doesn’t mean spend the money on scratch-off cards either. It means you end the money to fix up an existing structure or one you wish to purchase. In a situation like this, the banks and homeowner all win out because a home or structure in disrepair is losing money, makes the neighborhood an eyesore, and no one gains.
The good thing about real estate is that it’s not going away anytime soon. It’s still probably their biggest investment you’ll make as an adult. A home is security in the bank even if you have a long-term mortgage. It’s something you can bank against to further your education or other helpful personal investments. The new forms of rehab loans are perfect for this.
Here’s the scenario. You’ve got a home let’s say is worth $300k on the standard market. It needs roofing repair and other repairs both necessary and cosmetic. The cosmetic part is of most importance because it’s what people see when they pass by your home. A home that looks shabby and neglected won’t fetch the market price nor be of use to anyone as an investment. It will bring down others’ property values and that’s no good at all. One would be surprised at how much a home’s value can skyrocket with just paint alone. A house worth $300k could look or become a value of tens of thousands more with a few thousand invested in new gutters, roofs, paint, landscaping. The new rehab laws afford for this and qualifications may be strict in some areas but for a good reason. The key is to use the money responsibly and not put oneself into deeper debt.
A good equation would be to have a home worth $300k and you take out a rehab loan for $5k. You use that money for shoring up the plumbing or electricity, fix the roof and above all else make the property look new with new siding or paint. The real estate speculators see your home and boost its value to $350k. Now you’re talking an ROI that not only pays off your mortgage, and loan but puts some extra money in your pocket.
Companies like Hybrid Construction understand rehab loans like no other. Their staff will sit down with you and go over such a topic each step of the way. It’s due to their understanding, compassion, and foresight that has brought this company into the limelight of homeowners who are desperately in need of a rehab loan so that they can either live well in their home or prep it for selling on the market. Just sit down with them, let them explain things out clearly and when the dust settles you should be on your way to responsible home ownership that pays you back for all your time, money, and effort.