Buying a Home: See if Renovation Makes More Sense

Buying a Home: See if Renovation Makes More Sense

When picking a home to purchase, you must consider where you will live, the size of the home, and the amount of maintenance you are willing to perform. You may prefer a move-in-ready home or be willing to update a few areas to suit your taste. Alternatively, you may like to purchase a home at a lower price that requires extensive work but has solid bones, opting for a renovation loan Singapore banks offer at a promo.

Here are a few factors to consider when deciding whether purchasing a fixer-upper or a newly built or renovated house is the best option for you:

Renovators are a work in progress

Fixer-uppers are frequently the preferred option for first-time homeowners with a limited budget and those who enjoy a challenge.

Whether looking at fixer-uppers because they’re within your budget or because you prefer the notion of undertaking a large makeover, you must be willing to take on the necessary work. Due to a limited budget, you may perform a significant portion of the renovations yourself or delay the project room by room as you save. If this does not appeal to you, then a fixer-upper may not be the right house for you.

If the labor required in a fixer-upper is undesirable, focus your search on new construction and recently renovated properties that meet all of your criteria. Focus on fixer-uppers if you’re interested in immediately renovating the space through renovation.

You’ll be renovating regardless

Unless you’re moving into a brand-new, custom-built home, there’s a strong chance you’ll make at least minimal home improvements. It’s estimated that 60 percent of all homes purchased, regardless of their state at the sale, undergo some renovation.

Even if a kitchen or living room does not feel antiquated, it may be necessary to paint the walls, replace the flooring, and refinish or add cabinetry. Many individuals will have to affix this stamp to their homes.

Suppose you want to make alterations and modifications to your home. In that case, you may wish to purchase an existing home with a lower price tag to compensate for the additional funds you will spend on a renovation loan in Singapore.

Move-in ready houses are more expensive

As with any other home purchase, money will play a significant role in deciding between a newly built home and a fixer-upper.

Regarding homeowner’s insurance, a newly constructed house has significantly less risk than a home needing repair. Even though older homes can be insured, the higher chance of problems may result in a higher premium.

Financing is often easier if renovations are not funded

When purchasing a home that requires extensive repairs before occupancy, you will likely need to fund the renovation costs.

Many banks that offer conventional mortgages will not authorize a loan that exceeds the property’s existing market value since financing money for renovations is viewed as a risky lending strategy.

If you can afford the renovation loan in Singapore without a loan, it may be more advantageous to finance your mortgage independently from the renovation costs. You may be able to obtain a separate personal loan at the same time as your home purchase, or you may have to wait until some of the repairs generate sufficient equity to qualify for a home equity loan.

Renovated properties require extensive planning

For a home that requires extensive repairs, you will likely need to plan your renovation, including calculating your overall budget, determining the scope of work, and developing a timeframe.

You will need to assemble a team of professionals to assist you in completing the makeover, which could entail more individuals than you expect. If your remodeling is extensive and requires significant construction, you may need construction insurance to safeguard your property.

The location could or could not be a determining factor

Frequently, the location is a glaring contrast between new construction and fixer-upper houses. In the suburbs, new houses are more likely to be erected in master-planned subdivisions. Suppose you want to live closer to the city center or in a more established neighborhood. In that case, you have a greater chance of locating a fixer-upper and acquiring a good renovation loan from a Singapore top bank like DBS offers.

Your settings determine the weight that you assign to the location. In the wake of the coronavirus pandemic, you should place less importance on the city center’s vicinity, which can facilitate a shorter commute and provide convenient access to entertainment, stores, and other attractions. Some people will move to the suburbs in search of larger homes.

Read More: 10 IDEAS FOR CUSTOMIZING YOUR NEW HOME