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5 Tips for Scoring a Fixer-Upper Home Loan

Purchasing a fixer upper can be a great, affordable way to purchase a new home for a drastically cheaper rate than the market is calling for. However, when you purchase a fixer-upper, you actually have to take steps to fix it up. Many older homes have a wealth of opportunity to create a beautiful, livable home that you can spend your life in. When it comes down to it, even though fixer-uppers are much more affordable, you still might have to apply for a loan. There are a number of ways to increase your chances of being approved, so that you can start rebuilding the home of your dreams and hopefully one day move in. Here are five tips for scoring a fixer-upper home loan.

  1. Make sure that your credit score is strong. If your credit score is not strong, you could be forced to put more money down on a home or you might be denied a loan. So, you might want to look at your full credit report to make sure there are no mistakes. Mistakes are easy enough to remove and require calling the creditor and explaining your situation. If you don’t have credit, you might want to apply for a credit card and start building credit. If you have poor credit, you might want to start paying off your debts.
  2. Seek advice from loan officers. Before you sit down with a particular bank, you might want to call around and visit different banks to meet with loan officers. They can tell you some of the different things you need to do to increase your chances of getting approved. They will also tell you what they specifically like to see when someone comes in for a loan. Who knows, you might click with a certain loan officer, which could give you a huge leg up.
  3. Make sure that you know what to bring with you when you go in to apply for a loan. Of course, you should bring financial records, bank statements, credit score reports and more. However, the more organized you are and the more detailed you are, the better your chances of getting set up with a fixer-upper home loan. A loan officer doesn’t want to be inundated by a bunch of paperwork – they want everything to be organized.
  4. Have a detailed financial plan as to what you are going to do with the fixer upper. For instance, if the home needs a top to bottom remodel, you want to show that you have a contractor on hand and that you have the budget for what you are going to do to the property. A bank won’t give a fixer-upper home loan to someone that will keep the home as is.
  5. Be confident. This is perhaps the most important tip, because if you are slightly shy about applying for a loan, it will show that you might not know what you are doing. The more you can show a loan officer that you know exactly what you are doing, the stronger your chances are of getting approved for a loan.

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