How to Afford to Renovate or Update a Home

Today I thought I'd talk a little bit about renovation loans and buying an older home - - or in an older community - for a little less price. However, we've all seen prices starting to skyrocket all across the country, prices of new construction have continued to go up.

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One of the bigger trends we're seeing now is clients that either want to renovate their current loan and do renovations on the house they already live in, or they want to go purchase another house for a cheaper price outside of a new development in an older development and actually spend the time and money renovating that house after purchasing it.

There's a great product for that. There's several different types of loan programs available for renovation where you can purchase the house, add the renovation money in. In Texas, you're not allowed to do any of the work yourself. So we get bids from a contractor. We go in and we get an amount that it's going to take to renovate and then we present this to the appraiser when they go out to appraise the house.

The appraiser will take that whole into consideration and appraise the home as if that work was already complete. So in most older neighborhoods, we find that when the appraiser goes out to do the renovations, there's what we call a condition rating. It is definitely subject to opinions based on most of the appraisers I've spoken to over my career.

Depending on, a 30 year home going to a 20 or 10 or even a look brand new style home, You can see between $15,000 and $30,000 in extra value go into that home. So when the appraiser goes out to renovate that house in the older neighborhood, they'll say, "Hey, most of these houses have not been updated. They look and appear as if they're 20 or 30 years old.

Whereas the house you're buying, we're presenting bids to show that house condition to go up one or 2 levels." The appraiser will give us that extra value and depending on the appraiser, like I said, you'll see 15-30,000 per condition ready.

So it's a great choice if you're priced out of the ballpark or priced out of the price range of new construction but looking to alter or just an older home to fit your family's needs in today's market. I think it's a great choice. It'll help get you where you want to be. And if you have any questions at all, we're happy to help and present some options regarding a renovation product.