Purchasing a fixer-upper property can be an exciting and rewarding experience. HGTV is filled with programs of amateurs knocking down walls and tiling bathroom floors. The fact is that this is much harder than it looks and before diving headfirst into this kind of project, it’s critical to consider whether you are prepared for the venture.

5 Important Things to Consider Before Buying a Fixer-Upper Home

1. Financial Planning – The first step in buying a fixer-upper home is to establish a realistic budget. Include the purchase price, repairs costs, and any expected expenses for renovation or restoration. Once you have created a “known” list, then add extra for unexpected issues that will arise.   
2. Time and Effort – Renovating a fixer-upper takes time and effort, even if you hire a general contractor to oversee the project. Consider the overall scope of the project and evaluate your skills and level of time commitment.
3. Structural Condition – Before making an offer, thoroughly inspect the property’s structure and foundation. Recognize the impact of any issues uncovered and make sure to budget for the proper corrections. 
4. Real Estate Market and Location – Even a beautiful home in a terrible area is a bad investment. Consider such factors as property values, market trends and the potential for future appreciation. Work with a financial planner to make sure the investment fits your long-term goals. 
5. Legal Considerations – Before writing the offer, familiarize yourself with local building codes, permit requirements, and zoning regulations. Ensure the changes you anticipate align with local requirements.

Purchasing a fixer-upper home can be a wonderful investment and worthwhile project. By evaluating your budget, time commitment, property condition, and potential appreciation, you can be sure to choose the right situation for your goals and experience.

Before working in real estate, I didn't understand all the lingo. Things like “debt-to-income ratio (DTI)” would rattle around in my head. But let me tell you, now I know that understanding your DTI is like having a secret weapon in your home-owning journey. 

Simply put, your DTI is the percentage of your gross monthly income that goes to paying your monthly debt payments. It's a tool that lenders use to evaluate how much additional debt you can handle.

Understandably, calculating your own DTI might sound like a daunting task. That's why I encourage you to check out my comprehensive 90 Days to Homeowner guide. You'll find a handy DTI calculator to take the guesswork out of your calculation.

For now, here are a few DTI thresholds to know:
• Over 50%: You have a high level of debt. Consequently, lenders might hesitate to approve a mortgage loan because adding more debt to your plate is risky.
• 43% to 50%: This is also a high debt level, but you may be able to make it work. You should, however, strive for a lower ratio for better rates and financial security.
• 36% to 41%: Now you're on your way. With a DTI in this range, you've got a good balance between debt and income, and lenders are more likely to give you a thumbs-up for a loan.
• Below 36%: Congrats! You're in the gold standard zone. With debt levels hovering here, you'll have access to new loans or lines of credit.

If you have any questions or want a copy of my 90 Days to Homeowner (with DTI calc), comment below or message me. I’m here to help however I can.

Last year, the average U.S. homeowner held roughly $199,000 in equity. Not bad, huh?

If you’re sitting in a similar spot this year, you might wonder how to access your funds. 

Let's break down two popular options: the Home Equity Loan and HELOC.

Home Equity Loan • Similar to a second mortgage. • You receive a lump sum using your equity as collateral. • Fixed interest rates mean predictable monthly payments. • Ideal if you need a specific amount all at once.

Home Equity Line of Credit (HELOC) • Works like a credit card but with your home as security. • Allows flexible borrowing up to a set limit during the draw period. • Initially, you only pay interest on the amount you borrow. • After the draw period, you start repaying the principal and interest. • Comes with variable interest rates so that payments can vary.

The bottom line? • Need a large sum immediately? Consider a Home Equity Loan. • Prefer flexible access to funds? A HELOC might be your answer.

If you're thinking about how to tap into your home equity, feel free to DM me. Let me help you find the strategy that aligns with your financial goals.

Source: HELOC Vs. Home Equity Loan: A Comparison | Rocket Mortgage

The real estate market today is quite different from what it was just a few months ago. Mortgage rates have risen dramatically which impacts the borrowing power of home buyers. The frantic pace of the past few years has also slowed with homes staying on the market longer than we saw during the last few years.

With all these changes, many potential homebuyers are wondering when the prices will crash. In other words, when is the right time to buy? The housing market is affected by supply and demand. With a potentially smaller buyer pool, the assumption would be that home prices would fall to attract the few buyers still looking.

But prices are not reacting this way in many markets. In fact, the supply of homes nationwide has stayed relatively small, which in turn has helped prices stay steady. The fact is that rising interest rates are affecting sellers as well.

Most sellers are planning to purchase a replacement property. This means that many sellers are reconsidering their own ability to purchase the desired replacement home.

As a result, rather than attempting to capitalize on any lingering seller’s market, many have withdrawn instead, keeping the current inventory low and prices stable.

While it’s difficult to predict the effect of more interest rate hikes on seller’s behavior, homebuyers should concentrate on finding the right property for their needs rather than second guessing the market. It’s always the right time to buy the perfect property.

There’s been some concern lately about another housing market crash. Maybe you’ve read articles linking today’s environment with the Market Meltdown of 2008. Even with the talk of recession, this real estate market is very different and that means that most experts do not expect a crash, just a normal ebb-and-flow slowdown.

There are some significant differences in today’s situation: Loan Qualifying

Heading into the 2008 crash, loans were very easy to find. Almost anyone could qualify for a loan with zero down payment and lower FICO scores. The lending industry was taking huge risks, and this pushed home prices higher, artificially.

With stricter lending policies in place, not only do borrowers need to qualify properly, but appraisals are based on true value, avoiding over-inflated prices.

Housing Supply

Another difference is the housing supply. As home prices soared, so did the number of homes for sale. Currently, there is still a shortage of available inventory for the buyers still looking for a new home.

Equity Levels

Another huge difference is near record equity for most homeowners. The strong housing market during the pandemic pushed home values higher than ever before. Contrast this to the Market Meltdown era of short sales and foreclosures, and it’s clear that most sellers can still afford to negotiate and reap a healthy gain in the process.

What this means to you

The bottom line is that if you are a buyer looking to purchase or a seller ready to move, there is no reason to wait or worry that there is a crash on the horizon. The frantic pace of the market has slowed, interest rates have risen, but opportunities are still available in this market.