We are shopping for a new home currently. We are having problems finding a home we like that has a swimming pool. Can we roll the cost of building a swimming pool into our home loan at the low interest rate we are getting for our home loan?
Hi,
I think you will have a hard time putting cost's for a swimming pool into your loan as you can install a pool for as little as $18k or so, not including landscaping, lighting or other non direct improvements however a swimming pool regardless of age is probable only valued in your appraisal at $5k to $10k depending on size, finish and whether it also contains a jacuzzi?
Unfortunately a pool is considered an extra and does not recieve any where near value back against cost!
GR
The kinds of loans that will allow you to add the pool into the purchase of the house tend to require the house to be purchased considerably below the market price of the house. What usually happens is they tack on a home equity loan to the mortgage as a second but it is seamless to you.
As far as adding value it depends on where you live. In Houston pools are free. Free to buy not free to build. If you buy a 5,000 sqft house without a pool it will cost you about $500k if you buy a 5,000 sqft house with a pool it will cost you about $500k. There is no value other than time on the market. A house with a pool may sell faster but not for more money.
This used to be very common but lately it has become more difficult because of value issues.
What you need to do is call around and check with LO’s in your area. Ask them if they have a loan program that will allow you to “escrow” funds for a pool that you want to build after you close. Typically in this scenario the cost of the pool is added to the cost of the house and the appraisal is done “subject to” the pool being completed. Your down payment requirement would be based on the subject to value as well. For example if you were buying house for $250,000 and putting down 5% your down payment would be $12,500. If you decided to escrow for a $50,000 pool your 5% down payment would be based on the $250,000 + $50,000=$300,000. So your 5% down payment would be $15,000.
Another option is to buy the house then get a loan for the pool by itself and then once the pool is done you can refinance both loans into one. This can be risky though because you probably won’t get a dollar for dollar value from the pool and your equity could be upside down very quickly.
Hope this helps.