Historic homes are a popular option for homebuyers who are looking for homes with character. Although there are many benefits to buying a historic home, there are some drawbacks that could make owning the home challenging. If you considering buying a home that's considered historic, here are some considerations to keep in mind.
Obtaining Financing and Insurance Is Challenging
Depending on the age and condition of the home, you could have trouble finding the right financing and insurance coverage. A lender could balk at the amount it would take to finance repairs. If the repairs needed are too extensive, an insurance provider could pass on offering coverage. Even if you are able to obtain coverage, the cost could be far more than expected.
Fortunately, there are some available options for tackling both issues. For instance, instead of applying for a traditional loan to cover the costs of repairs, you can apply for a rehab mortgage loan. The loan would help cover the price of the home and provide a certain amount of funds to make repairs. The loan is specifically earmarked for homes that are in a state of disrepair.
When it comes to insurance, you will have to shop around to find the right company. There are companies that are willing to take the risk on a historic home. If your home is not locally registered as a historic home, but is registered federally, let the insurance company know. Without local registration, your home does not have restrictions that could impact how much your coverage would be.
There Could Be Restrictions
Homes that have been designated as historic homes could have restrictions on them imposed by the district in which they are located. For instance, the local planning and zoning committee could set in place restrictions for how the exterior of the home is maintained. If there are restrictions in place, you could be limited in which changes you can make to your home.
There is good news, though. There is not a blanket list of restrictions that applies to each historic home in your area. The restrictions are set by home. The restrictions that apply to one home might not apply to another home in the area. Before ruling out a historic home in which you are interested, find out what the restrictions are.
If there are restrictions in place that you do not agree with, you can seek the approval of the planning and zoning committee. Work with a real estate agent to find out whether or not the changes you want would be approved.