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Amerifirst blog

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DIY Home Decor: How HGTV is Affecting the Housing Market

We live in an instant-gratification society. We want what we want, and we want it now. Some of this is simply human nature. Some of the fault for this lies at the feet of our mass media. We're trained to think a complicated murder investigation can be solved and prosecuted in an hour TV show. Such is the case when it comes to all things home related.

 

Thanks to networks like the DIY Network and HGTV, we have become accustomed to seeing home renovations wrapped up in a single episode, by homeowners just like you and me. However, that's not how real life works. In real life, remodeling projects take time and a lot of work. Sometimes, they even take the work of a professional!

diy-home-decor-how-hgtv-is-affecting-the-housing-market

I recently received the email below from the owner of a construction company that specializes in helping homeowners and home buyers fix up their homes with something called a renovation mortgage. This kind of home loan allows you to roll the cost of construction into the mortgage, all based on the after-improved value of the house. Check out what Josh Smith with Front Porch Group has to say about our "need it now" culture.

 

What HGTV Is Not Telling You
Everyone loves HGTV.  Property Brothers, Rehab Addicts, House Hunters, Fixer Upper - they are all great shows.

I would bet you have heard clients say, "I saw that on HGTV!"  But there is one thing that HGTV does not talk about in 99% of their programs. That is: How can I get financing to do all these awesome renovations?

Tell your clients about renovation loans.  Ask them, "What's your reason for buying and renovating?  Want to be your own HGTV star?"

We have projects going right now in Sturgis, Battle Creek, Newaygo, Holland, Grand Rapids, Saranac, Paw Paw, Portage, and others.  We can make your client's HGTV dreams happen!

We are a specialty general contractor who focuses on a very tight niche. We ONLY do repairs/renovations that are part of a home purchase. We ONLY work with home buyers, lenders, and real estate agents. We ONLY work with FHA 203k, HomeStyle, and Escrow Repair Loans.  
Josh Smith | Builder & Owner | Front Porch Group, Inc.
 

That's a pretty direct email with good information directed towards other housing market professionals. But home buyers can take the knowledge and put it to use. 

What is a Renovation Mortgage?

Picture this scene: you’re tired of renting and you want to find your own house. As you begin to explore the neighborhoods in which you’d like to live, you find many foreclosed homes up for sale. Many times, these homes are in disrepair. Sometimes they’re missing things like appliances, the furnace or a water heater. But with prices what they are, it’s hard to walk away from these properties. Enter home improvement loans – also known as the Renovation Mortgage.

 

You can take advantage of one of these programs and roll the cost of repairs, renovation, rehabilitation and home improvements into the mortgage and pay just one monthly payment. The benefit to this is that you can then write off the interest on your taxes. You can’t do that when you finance the work and supplies on a credit card or store credit line.

A renovation mortgage allows you to buy the house in its current condition and assume the responsibility of making the necessary repairs. So you can buy the house in “as-is” condition with a mortgage that takes into account the after-improved value once the work is completed. The cost of the work is amortized over the life of the mortgage, and stays with the home in the event that you decide to sell.

 

This is not a do-it-yourself home improvement loan. Renovation mortgages require licensed professionals for most of the work. This protects you and the lender in case the work does not get finished. Unfinished work devalues the home, and makes life difficult for all parties involved.

 

Renovation mortgages can include several options. Learn about your options in the guide below.

 

image source HGTV

Related Posts

5 Reasons Not to Skip Your Home Inspection

You found a house you love—hooray! But with lots of other buyers breathing down your neck, you feel like you need to act fast. To make your offer more attractive to the seller, you might be tempted to skip your home inspection, but here are five good reasons not to! 1.) Not all problems are obvious. It’s easy to spot issues like a crack in the sink or a broken light fixture. But do you know how to recognize foundation problems, termite infestations, outdated wiring, or sewer system problems? Trained home inspectors do and taking the time to have them go over the entire property before you sign the papers can prevent you from buying a headache instead of a home. BOTTOM LINE: The great thing about an inspection is that if you see major problems you’re unwilling to take on, you can change your mind and walk away. 2.) You may not be able to afford the repairs. If you’re like many new homeowners, you may not have much set aside to pay for needed repairs after saving up for your down payment and closing costs. While you may not mind waiting a bit to repaint or update appliances, waiting on problems like leaky roofs, broken plumbing, or infestations will only make them worse, and some issues, like broken furnaces, may need to be repaired right away. BOTTON LINE: You don’t want to go deep into debt to keep your home safe and comfortable. Instead, it’s worth negotiating with the seller to pay for repairs. If they refuse, you can simply walk away. 3. Some problems can make it harder to insure the home. Getting home insurance is essential because lenders need to see an insurance policy before you can close on your home—and of course, you’ll want to have your home protected in case anything goes wrong. However, some companies may decide that your home’s older electrical systems, plumbing, or building materials make it too risky to insure. BOTTON LINE: If essential updates are needed, the only choices are to ask the seller to pay for them, pay for them yourself if you can afford it, or walk away from the deal. 4. Serious issues can affect the resale value of the home. Your home is probably the biggest investment you will ever make. However, if it has major problems, instead of building your wealth, it could turn into a lousy investment that threatens your financial well-being. BOTTON LINE: While a home inspection typically costs a few hundred dollars, it’s an excellent investment in your peace of mind and financial health. 5. Some problems can threaten your family’s health or even your life. This sounds scary, but it’s no exaggeration. Issues like lead paint, black mold, radon (an odorless radioactive gas), or carbon monoxide leaks can cause serious and sometimes fatal health problems. BOTTON LINE: These issues are also easy to miss without a professional home inspection, and it’s simply not worth taking the risk. While it’s not easy to compete with other buyers who are bidding for the house you want, home inspections are one area where you don’t want to cut corners. To protect your physical, financial, and mental health, there’s no substitute for a professional home inspection.

6 Tips on How to Buy a House in Today's Market

Buying a home may be the American dream. But with escalating home prices, rising interest rates, low inventory, and inflation, as a first-time buyer, you may be wondering if that dream is out of reach.

Let's Talk FHA Loans

  If apartment living is getting old, or you've outgrown your parents' basement and house rules, you may be thinking about buying your own place. For this reason, you may be interested in learning about home loans that offer low and no-down payment options and have flexible lending requirements. One of these is the FHA loan. Let's take a closer look. 

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