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teach123 teach123 is online now
 
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teach123
 
Joined: Dec 2005
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Loan question
Old 05-19-2020, 03:27 PM
  #1

We are debating between buying a house or fixing up an old farmhouse. Obviously I need to make an appointment at the bank but I thought someone might have advise about fixing a fixer upper. A little background - the house I'd fix up is free. It is an old family house built in the early 1900s. It would need everything....plumbing, insulation, foundation work, etc. If we do some of the work, we could probably do it for about 100,000. We have saved about 30,000 for a down payment on a house so if we choose to fix up the farmhouse we could use that. But I dont know what kind of loan the bank uses for the improvements. It's not really a home equity loan because the house isn't worth much. Would I need a personal loan? Is there another type of loan I could apply for?


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Old 05-19-2020, 03:35 PM
  #2

We used a construction loan.

We had to get an estimate from the contractor for the work, then we took that to the bank. We were approved for the entire amount of the work, but the bank only released the money in stages. They had to approve that the work was being done before they released the next amount. I think it may have been three times the bank representative came to check the progress. It was a four month process for us.
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