The thought of buying an unfinished home no doubt sounds a little scary. However, purchasing an unfinished home may be just the thing you need in order to save a great deal of money on a new home. By buying an unfinished home, this allows you to keep your monthly mortgage payment as well as your initial investment into the home at a low price.
The Truth about Unfinished Homes
An unfinished home is typically a home where the builder has left the upstairs area unfinished. While you may take out a home loan to purchase an unfinished home, the question remains is whether or not you want to complete the building process on your own with your own capital or whether or not you want to take out a home equity loan to invest into completing the unfinished area.
In other cases, some unfinished Homes are not as drastic in nature and may have unfinished plumbing, roofing, electrical aspects, or even framing that need to be completed. Before you purchase any type of unfinished home, you will need to be well aware of what must be finished at how much money you will have to invest in order to complete the job.
Finding a Lender for Your Unfinished Home
Before you consider unfinished homes as an option, you first need to find a bank that will provide you with a loan given the current condition of your home. In some cases, banks will require that your home is not only up to city codes and standards, but that is also in livable condition. In short, this simply means that the rooms in your home such as the bedrooms, bathrooms, and living room are all finished. If any of these areas are unfinished, a great majority of banks will not give you a mortgage.
It is also important to note that most banks traditionally turn down mortgages for unfinished home given the fact that they believe they may have trouble selling your home in the event that you default on your mortgage. With that in mind, it is best that you check with your bank first before you embark on investing in this type of real estate.
If you are still interested in purchasing an unfinished home, take the time out to talk with the builder. To gather, you can go over plans and decide what you can and cannot do without during the building process. In such cases, you can land a home that is affordable and allows you to make the necessary repairs at a much lower cost while still obtaining the home of your dreams.