With the current real estate market favoring sellers, prospective buyers in many areas are facing difficulties in finding a move-in ready home that fits both their needs and their budget. With competition high for the best listings, many of which see offers within hours of being placed on the market, many buyers are left with choices that made up primarily of distressed or foreclosed homes, or those in need of updating or renovating to meet their needs.
Many popular mortgages have condition requirements
But as these buyers quickly learn, many of the most common home loans currently used require homes to meet condition and value guidelines before the loan can be approved. Because of this, buyer who had planned to use VA, standard FHA, USDA Rural Development or a standard conventional loan will likely not be able to move forward with purchasing a home that needs extensive work. If you are a prospective buyer facing this dilemma, you may not have heard of an FHA 203k home mortgage option that helps buyers purchase these less-than-perfect homes and then renovate them to fit their needs.
FHA 203k home loans combine the purchase and renovation into just one loan
The FHA 203k home mortgage may offer a real solution for buyers who want to purchase an imperfect home and renovate it. In fact, the 203k home loan offered by the Federal Housing Authority (FHA) allows buyers to use just one loan for both the purchase and renovation process, instead of trying to coordinate both a construction loan and a regular mortgage. This makes the process more streamlined and eliminates many of the concerns a buyer might have if the repairs or renovations take longer than expected.
Important facts about the FHA 203k home loan
To determine if the FHA 203k home loan would be a good fit for you, consider these important points:
To learn more about the FHA 203k home loan and get a better understanding of the type of home purchase it is best suited for, buyers should discuss the matter with their trusted real estate agent.
Welcome to my website. My name is Larry Silva, and I want to talk a bit about private mortgage insurance. You may have heard the term PMI mentioned when you were in the process of purchasing real estate. When I first heard my lender talking about PMI, I was very confused. It was my realtor who sat me down and explained what private mortgage insurance was and when someone is required to purchase it. He told me that PMI is not lifelong insurance; it can be cancelled when the mortgage principal balance reaches a certain point. Once it was explained to me, private mortgage insurance was no longer a mystery or a confusing concept. I would like to pass on what I learned and hope that you find it to be of value.