If you’re like many people searching for a home for sale in Aspen, Basalt, Carbondale, Snowmass or Woody Creek, you know that you’ll need a mortgage – and if you’re a first-time buyer, you probably also know that there’s a shortage of move-in-ready homes you can find that fit within your budget.
Here’s the deal: You might want to try a fixer-upper mortgage.
What is a Fixer-Upper Mortgage?
Really called a “renovation loan,” a fixer-upper mortgage can be used to buy a home and, at the same time, make structural and cosmetic improvements.
There are two types of these loans widely available: FHA 203(k) and HomeStyle.
FHA 203(k) Loans
Designed for primary residences only, FHA 203(k) loans require a minimum credit score of 500 and a down payment of at least 10 percent. If you have a credit score of 580 or above, you could put down as little as 3.5 percent.
You can’t use these loans for things the FHA considers luxuries (like swimming pools), but you can use them to renovate a home and make it more livable.
A Fannie Mae HomeStyle loan can be used on a primary residence, a second home or an investment property. You must have a credit score of at least 620 to borrow this type of loan, and you have to have a down payment of either 3 or 5 percent (it depends on whether you’ll live in the home, you’re a first-time buyer, or you have low or moderate income).
There aren’t a lot of restrictions on the improvements you can make with a HomeStyle loan, other than the fact that the improvements you do make are “permanently affixed to the real property (either dwelling or land).”
Are You Buying a Home in Aspen or the Surrounding Communities?
We’d love to help you find your dream home here. Call us at 970-429-8275 or contact us online to let us know what you’re looking for so we can start searching right away.
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