Many homes buyers view in this current real estate market are either foreclosures or homes that are in a short sale status that is in need of repairs. Problem is with first time buyers, the fear of not having the finances to repair the perfect home in the perfect location stems from lack of educations. There is a savior. It is called the FHA 203 (k) Rehab Loan which is a loan program that rolls the cost of home repairs into the amount of the mortgage loan. It helps the buyer(s) free up the cash needed to make repairs to a distressed property and allows assistance to the first time buyer in financially managing the cost of remodeling or the repair process.
Through an FHA 203 (k) Rehab Loan, the cost of the homes repairs is built into the loan amount. The home must appraise for the value as though it is in turn key condition. The best way to know market value is through a licensed real estate professional who will provide comparisons of other homes sold within the area a buyer is purchasing a distressed home through an FHA 203 (k) mortgage loan program. By putting down as little as 3.5% - the loan process may take up to 60 days to close. In this case, the loan closes prior to any work being done to the property, however, keep in mind that all repairs must be done within 6 months following the closing. Keep in mind that you must owner-occupy the home following the closing as well.
The beauty of this program is it is used for first time buyer purchases along with current home owners that are refinancing. A mortgage lender who is certified to write the http://realestate.cleveland.com/ FHA 203 (k) loans will also educate and estimate your qualifications to see if a buyer does qualify for this type of loan. While the market is currently in the buyers favor, dont be scared to look at homes that are in a distressed shape. In fact, be certain you are pre-approved and qualified for the FHA 203 (k) program prior to viewing any home in distress, this way it is understood what steps need to be taken in the process. It is also encouraged that a home that may be listed on the market for a certain amount, is also a home that can be negotiated to a lower amount by a licensed real estate professional that also represents buyers. Understanding what needs repaired is also important. Know the difference between luxury and necessity. Example a hot tub is a luxury amenity while a roof is a necessity.
Normally repairs allowed in an FHA 203 (k) loan are structural repairs, upgrades to kitchen, bath, flooring and painting, structure and mechanicals. If a buyer is looking at distressed properties that are short sales, understand that the seller who is selling their home for less then what they owe through a short sale agreement with their bank, also is a seller who needs to remain in good communication and constant updates to their bank to be able to sell the property. In this current market,
I do see sellers under a short sale agreement who fail to stay in compliance with their bank to get a third party approval for a buyer who wants to proceed with a purchase. Having stated that fact, it is important to stay involved with communication through a licensed real estate professional to make sure the seller does botanique at bartley update their information under a short sale and all documents from both seller and buyer are handed into a negotiator in a timely and due date manner. Otherwise a third party approval can get denied. Another point to remember is if your agent provides you with information on a property for sale that may be a bank foreclosure or short sale in distress; do not pay attention to remarks where it may say buyer must be pre-approved through XYZ Bank. The fact is, if a buyer is seeking an FHA 203 (k) loan or any loan for that matter, the buyer has the right to choose the mortgage financial institution that they feel most comfortable with and that fits their needs as a borrower.
Remember, as a buyer, you are purchasing a property to call home. No matter what type of market we are in, real estate is the best investment anyone can make in a lifetime. Know the facts about current market conditions, stay on top of loan programs, be prepared and pre-approved for a loan that suits your needs and qualifications always stay in communication, and do not be afraid to look at homes that are in need of repair. Learn about the FHA 203 (k) loan programs and if you are a first time buyer see if you qualify for one and if so, get the pre-approval process going with the lender prior to stepping foot into looking at homes.
Get a Consultation By a Licensed Real Estate Professional simply by requesting an appointment by calling or emailing, whether it is about buying a property or selling one. Let a Real Estate agent be your guide to achieving your real estate needs.
Through an FHA 203 (k) Rehab Loan, the cost of the homes repairs is built into the loan amount. The home must appraise for the value as though it is in turn key condition. The best way to know market value is through a licensed real estate professional who will provide comparisons of other homes sold within the area a buyer is purchasing a distressed home through an FHA 203 (k) mortgage loan program. By putting down as little as 3.5% - the loan process may take up to 60 days to close. In this case, the loan closes prior to any work being done to the property, however, keep in mind that all repairs must be done within 6 months following the closing. Keep in mind that you must owner-occupy the home following the closing as well.
The beauty of this program is it is used for first time buyer purchases along with current home owners that are refinancing. A mortgage lender who is certified to write the http://realestate.cleveland.com/ FHA 203 (k) loans will also educate and estimate your qualifications to see if a buyer does qualify for this type of loan. While the market is currently in the buyers favor, dont be scared to look at homes that are in a distressed shape. In fact, be certain you are pre-approved and qualified for the FHA 203 (k) program prior to viewing any home in distress, this way it is understood what steps need to be taken in the process. It is also encouraged that a home that may be listed on the market for a certain amount, is also a home that can be negotiated to a lower amount by a licensed real estate professional that also represents buyers. Understanding what needs repaired is also important. Know the difference between luxury and necessity. Example a hot tub is a luxury amenity while a roof is a necessity.
Normally repairs allowed in an FHA 203 (k) loan are structural repairs, upgrades to kitchen, bath, flooring and painting, structure and mechanicals. If a buyer is looking at distressed properties that are short sales, understand that the seller who is selling their home for less then what they owe through a short sale agreement with their bank, also is a seller who needs to remain in good communication and constant updates to their bank to be able to sell the property. In this current market,
I do see sellers under a short sale agreement who fail to stay in compliance with their bank to get a third party approval for a buyer who wants to proceed with a purchase. Having stated that fact, it is important to stay involved with communication through a licensed real estate professional to make sure the seller does botanique at bartley update their information under a short sale and all documents from both seller and buyer are handed into a negotiator in a timely and due date manner. Otherwise a third party approval can get denied. Another point to remember is if your agent provides you with information on a property for sale that may be a bank foreclosure or short sale in distress; do not pay attention to remarks where it may say buyer must be pre-approved through XYZ Bank. The fact is, if a buyer is seeking an FHA 203 (k) loan or any loan for that matter, the buyer has the right to choose the mortgage financial institution that they feel most comfortable with and that fits their needs as a borrower.
Remember, as a buyer, you are purchasing a property to call home. No matter what type of market we are in, real estate is the best investment anyone can make in a lifetime. Know the facts about current market conditions, stay on top of loan programs, be prepared and pre-approved for a loan that suits your needs and qualifications always stay in communication, and do not be afraid to look at homes that are in need of repair. Learn about the FHA 203 (k) loan programs and if you are a first time buyer see if you qualify for one and if so, get the pre-approval process going with the lender prior to stepping foot into looking at homes.
Get a Consultation By a Licensed Real Estate Professional simply by requesting an appointment by calling or emailing, whether it is about buying a property or selling one. Let a Real Estate agent be your guide to achieving your real estate needs.