First-time homebuyers with limited budgets who want to live in Illinois can usually benefit from buying a fixer-upper. Usually, these houses are below market value and the buyer can get a return on their investment quickly or build up equity in the home after the repairs are completed.
Before purchasing any Illinois distressed home, consumers need to research the proper type of loan necessary for the renovation along with local contractors that can do the work. A 203(k) or HomeStyle conventional renovation mortgage allows consumers to go in and purchase the home and then start working immediately with a contractor — the renovation costs will be bundled into the loan. So, one portion of the mortgage pays for the house while the other is deposited into an escrow account. As work is completed, the mortgage lender sends an inspector to review the work. After the work is completed, money is released to pay the contractor.
Don’t underestimate the amount of work necessary to bring the fixer upper back to livable or saleable condition. Get quotes from your local Illinois contractor on repairs; this should be done before purchasing the home. The last thing you want is to purchase the home and find out that there’s massive structural damage to home. Those situations never end well for the homebuyer.