Renovation loans (where a borrower can finance both the purchase and/or refinance of a house and the cost of repairs and improvements), can offer great opportunities for both your customers and your business.
Of course, as is the case with any mortgage transaction, the success of a renovation loan depends on several professionals working together. If you wish to establish yourself as the rehab loan expert, the go-to mortgage pro for fixer-uppers, it might be worthwhile to begin to network with others in your market who can work with you on these loans.
Here’s who you might want to include on your rehab loan dream team:
The Real Estate Agent
Not all real estate agents are interested in renovation loans. The process takes a little longer, and they may not feel comfortable advising customers about properties that need some work. Seek out the agents who love working with buyers looking for fixer-uppers. They can provide a huge value to their customers by helping them see past ugly carpet, outdated kitchens, and decks in disrepair. Establish a good working relationship and you could be excellent sources of referral business for each other.
The Home Inspector
With a home in need of rehabilitation, it’s all about getting an accurate idea of what needs to be fixed. Getting a home inspection early in the process can help ensure that not too much time is lost should the supposed diamond in the rough turn out to be a money pit in the making.
The General Contractor
Most rehabilitation loan programs require that all work be done by a licensed general contractor. This isn’t the time for do it yourself projects. Having a reliable general contractor who does quality work can really make the difference in both the process and the finished product. The loan terms also specify when the work must be completed and that it is necessary to stick to the approved budget. When you find a professional you can count on, you’ll likely have the opportunity to recommend his or her services to other buyers on the hunt for a fixer-upper.
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