You found the perfect home, and you can even afford, it BUT the roof is old and needs to be replaced. How can you buy your dream home?
This happens very frequently. A house is for sale that needs a new roof. IF you are paying cash then IN THEORY one could buy the house and not insure it, or have only say liability only on it. This is a big risk. Think about that decision.
In the Jupiter area about 50% of the time there IS financing involded. And, if the property is being financeed then the lender will require the property to be insured from Closing forward. But with an old roof no one will write the policy. What to do?
- Assuming you have the cash to pay for a new roof AFTER Closing on the property it MAY be possible to insure it short term with what is called a Builders Risk Policy. You have this policy for a short time while you’re putting on a new roof and then cancel it and get a standard policy. They are expensive.
- If you do not hve the cash to pay for a new roof AFTER Closing then one could use the Builders Risk Policy in conjunction with a loan that includes the cost of the new roof in the permanant financing by using an FHA 203(k) loan, Fannie Mae’s HomeStyle Renovation, or Freddie Mac’s CHOICERenovation loan. These would be be loans under the applicable loan limits being, in Palm Beach County, 654k for the FHA loan and 766k for the Fannie/Freddie loan products.
