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My budget and location requirements are making me consider a FHA 203k loan. But I haven't read many encouraging posts about this type of loan. Would you please share your experience? Thanks!
I originate these loans and I have found that most people that have been through the process, did not have an enjoyable experience. With that said it is also the case that most of these people did not work with a specialist in this loan.
Most loan officer's do not know this loan well. They are not familiar with all the things that can go wrong with these loans and therefore the borrowers, realtors, and contractors end up being unhappy with the process. In defense of the loan officer that is not a specialist, I would like to note that many of the problems are a lack of having expectations set. But, how can the loan officer that just does one for a customer he wishes to help be expected to know enough about the process that they can educate everyone.
Renovation loans are complex and have many moving parts and lots of hands in the process. It leaves room for mistakes to be made and that is why you need a specialist. So, that when someone makes a mistake it can be caught early in the process and corrected. A loan officer that has not done one of these loans or only a couple really cannot be expected to keep track of what everyone is suppose to be doing. In addition a specialist knows what information they need to give whom, so that they can see to it people have the right expectations of the process.
In conclusion, these loans can be an amazing opportunity with limited complications. Note I say limited because with everything that is happening in the process you will experience bumps, but those bumps don't have to be mountains and they do not have to be complete surprises that cause huge amounts of stress. And if everyone does their part they can go smooth and allow the borrower to have the home in the location they want, pretty much exactly how they want it, and with in their budget. That is why I think it is a great loan product and maybe the best one available today.
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