Rolling in renovations

 

Program puts repair costs in home loan

 

By Kristyne E. Demske

C & G Staff Writer

     It’s a buyer’s market, but even so, sometimes buyers don’t want to settle for a home they’ll have to sink thousands more in for repairs before it becomes their dream home.

     But now a new mortgage program could make those fixer-uppers more appealing.

     Coldwell Banker Schweitzer Real Estate, with Atlas Mortgage in Livonia, is rolling out a new program called Renovate First, designed to help roll renovation costs into the mortgage, guaranteeing buyers that the repairs will get done without any more out-of-pocket expenses.

     “There is no such thing as a perfect house,” said Richard Landuyt, associate broker and manager with Coldwell Banker Schweitzer Real Estate in Shelby Township.

     He said the program allows buyers to purchase a home that’s undervalued because of the work needed, borrowing on the future value of the home to complete the renovations.

     “It allows you to roll in not only the renovation costs, but the closing costs,” he said.

     The program lets buyers borrow up to 90 percent of the future value of the home. For instance, a home with a purchase price of $105,000 and an after-repair value of $165,000 would allow the borrower to get a mortgage for $148,500, freeing up $43,500 for renovations.

     Landuyt said the money for renovations is then set aside in escrow and the buyer is paired up with a coordinator at Lowe’s, which will coordinate the renovations. The home improvement store will work with the contractors doing the installation and even gives to the homeowners a 10 percent discount on materials.

     “They have 120 days to put the project together,” he said. “Now you get the house that is, ‘well this might work but it’s not perfect to, wow, this is really perfect.’”

     LaTonya Alexander of Southfield said that was her experience with the program. She heard about it through a mutual friend and thought it was the best mortgage rate and simplest process she could find.

     “It was easier for them to include it in the mortgage, and we didn’t have a lot of upfront costs, as opposed to another mortgage,” she said.

     Her Southfield home got a roof job, new vinyl siding and cosmetic changes on the interior because of the program.

     “I would recommend it because it was an easy process,” she said. The company “walks you through every step. If you have questions, they’re very easy to get in contact with.”

     Landuyt said brokers with his company help buyers pick out homes that could be approved for this sort of mortgage, for example, a home in disrepair that’s priced at $150,000 in a neighborhood where the other homes sell for $200,000.

     “It’s such a great thing for homeowners,” he said. “Especially when you don’t have to settle.”

     And although he said they’re the first real estate office that has embraced the program, offered through a Livonia-based mortgage company, it’s open to anyone.

     “If they don’t have a Realtor, we can help them. If they do have a realtor, this loan is available to anybody,” he said. “It fits a niche in the market today and it fits a need.”

     To find a broker through Coldwell Banker Schweitzer Real Estate for more information on the program, log onto www.cbschweitzer. com, or call (586) 739-7300.

     You can reach Kristyne E. Demske at kdemske@candgnews.com