Buying a home is a huge decision. Many factors go into choosing the right place. Each buyer needs to think carefully about specific issues such as their overall budget, their ideal location and the type of home they personally prefer. One of the most important decisions any buyer must make is whether or not to buy a new home or buy one that perhaps needs more work. The choice between the two will depend on many factors including the buyer’s ability to fix the home, get a first mortgage and their understanding of local zoning and issues such as mortgages in Washington DC.
What is a Fixer Upper?
Many buyers are not sure what constitutes a so-called fixer upper. While definitions vary from place to place, many a Washington DC mortgage lender will consider a fixer upper a home that needs a lot of work to be made habitable. A fixer upper will generally have serious structural problems that may include a leaking roof, poor plumbing and wiring that is no longer up to national safety codes.
The Pluses of Buying a Fixer Upper
The pluses of buying a fixer upper can be quite strong. Many homes that need work go for far less than a similar house in better condition. Many mortgage companies such as First Savings mortgage are happy to lend money to those prepared to fix up a property. In general, the regional market in the Washington DC area is quite favorable to sellers. Many area properties, once fixed up, can be quickly sold for a tidy profit. In a good market like this area, a correspondent lender is happy to work buyers who have the know how to buy the home and do the necessary work to update it. Many older homes also have mature landscaping with elements such as elegant old trees, beautiful rose bushes and classic wood fencing.
The Problems With a Fixer Upper
Many people see a fixer upper and start to get excited. They see a low price and lots of possibility. However, a Washington DC mortgage lender may not feel the same way. In some cases, the home has major, serious problems that may take months if not years to remedy. A home buyer who has no prior experience with updating a home may lack the skills necessary to make the changes required to bring the home up to snuff. Instead, they may need to hire professionals for them. This can cut down on any expected profit once the house sells. Even in a booming market, as lenders like First Savings mortgage know well, there can be temporary downturns that bring down the overall value of the home.
What is a New House?
While some buyers love the idea of a fixer upper, other buyers find the option of a new house or a home that has been completely remodeled far more appealing. A home is brand new or one that has been recently remodeled is generally considered to be a new home. The lot owner may have put in an entirely new house recently or converted an existing structure such as a barn to residential housing.
The Potential Pluses of Buying a New House
There are many pluses to buying a new home as a correspondent lender will tell their clients. Newer homes are up to date on all housing codes. This helps make them safe. A new house will not contain problems such as asbestos and oil tanks that can not only present a health hazard but may be very costly to remove. The new house may also have features such as central air conditioning and central heating that are not found in older homes and can be very hard to install. Newer homes also have desirable features such as updated appliances, generous kitchen cabinetry and modern design elements such as walk-in closets and wiring that makes it easy to create to accommodate all of the homeowner’s electronics. A new home may even come with a home warranty the buyer can turn in the event of any minor problems during the first years they own the home.
Possible Drawbacks of Buying New
The prospect of buying a new home may sound exciting. A potential buyer can walk inside the home and find it instantly appealing. At the same time, there are at least a few potential problems when buying a new home. Many new homes, unlike their older counterparts, cost a lot more money. A new home can be up to twice the price of an existing home or even more. New homes often come with more property taxes, making it harder to get mortgages in Washington DC. Newer homes may come with less property and may be located further from urban areas than other homes. A new home may also not allow for much personal customization. The buyer cannot choose the number of bedrooms or bathrooms they want without making major and costly changes to the home. A new home may also lack some of the charm that are common in older homes such as elegant woodwork on the front porch or a finished basement.
Ultimately each buyer must think about what is truly important to them in the home they want. Every home buyer is different. A single mother may want to look for ways to reduce her housing costs and avoid the need to do lots of yard work each year. In that case, a new condo development with updated appliances and a homeowner’s association to do the work for her can be ideal. Someone with lots of prior experience working in housing development, by contrast, can find it far better to go for the fixer upper. Their know how can help them get an older home in great shape quickly, easily and under the budget they have in mind. Each home buyer should carefully consider their home buying options.
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