How to Turn Your Home Repairs Into Home Equity
Home repairs don't have to be a deal breaker when buying a house. Making upgrades can actually add equity to a home. In fact, a home improvement loan like the FHA 203k can actually create instant equity in some scenarios.
Imagine looking at a house that needs a bit of work. Maybe the windows are old and the kitchen needs updating. Maybe you're not a do-it-yourself type and you might shy away from this house even though it's in the perfect neighborhood and has exactly the yard you want. Instead of walking away and settling for a house that may not need as much work, you can finance the home repairs with the 203k.
Since you're probably getting a good price on the house, any improvements you make will add value to it. And because the 203k amortizes the work over the life of the mortgage (it's one loan, not a second mortgage or line of credit) you get to have that value right away for a good monthly price.
A new kitchen, energy efficient windows (plus maybe you added a new paint job to the entire house while you were at it) definitely add value to the house. More value is instant equity. You can also make other improvements to the house like a new deck, roof repairs, basement waterproofing or driveway repairs. Any of these projects would create home equity. In this way, home repairs don't have to be the end of the line when house hunting.
Learn more about the FHA 203k with our free eBook. "The FHA 203k Survival Guide" goes into detail about this home improvement loan and how it works, plus a closer look at what's eligible for this kind of financing. Get your free copy at the button below.
(home repairs creative commons credit)