Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I am considering a house to buy and was unsure how a mortgage would work in this aspect...
House is $200k. I am approved for over $300k.
I can put down 20% on either price point.
I want to buy 200k home and put in 50-100k in renovations (possible addition)
What are my mortgage options? Ideally I would like 1 30yr mortgage to encompass both the price of the house and the renovations. Is that possible? In todays market how are mortgages like this handled? Scared getting a home improvement loan may be at much higher interest rate or something.
I am considering a house to buy and was unsure how a mortgage would work in this aspect...
House is $200k. I am approved for over $300k.
I can put down 20% on either price point.
I want to buy 200k home and put in 50-100k in renovations (possible addition)
What are my mortgage options? Ideally I would like 1 30yr mortgage to encompass both the price of the house and the renovations. Is that possible? In todays market how are mortgages like this handled? Scared getting a home improvement loan may be at much higher interest rate or something.
Anyone know my options?
FHA has a perfect loan for you, I think it's a 203B. You can get purcahse money plus renovation money in draws. FHLMC used to have a program also, but I think they discontinued it.
Talk to somebody else. The FHA 203 loan will allow you to borrow against the proposed value of the home.
Purchase price: $200,000
Proposed renovations: $60,000
Value after renovations: $300,000
FHA would make that loan. The lender you spoke to probably isn't approved to write that type of financing. The FHA web site has a list of approved lenders.
I talked to someone at BB&T about a single close mortgage/construction loan. The house in question needed about as much in repair as the purchase price (it was a falling down house on a lot of land).
Anyway, I didn't end up getting the house for reasons unrelated to financing, but this system had a "construction phase" (for me 1 yr) with draws, which was 6.5% interest only, then rolled into a conventional 5% (at the time, may be a little lower now) 30 year fixed when the construction was done.
I think it did require 20% down. FWIW, that house did NOT qualify for FHA because it required too much work and was not considered livable at the time.
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,845,674 times
Reputation: 958
Actually the FHA renovation program is the FHA 203(k). You're mortgage guy is either not FHA approved or has no experience with the FHA 203(k). I would suggest that you talk to some other mortgage professionals. Don't let this guy tell you that there are no other options as there definitely are.
Thanks for the help. My guy at WF clearly only handles convential loans. He got me in touch with someone in their renovation department. So that is one option. Though a quick look at BB&T looks like more what I want.
I should have a better idea today once I have my contractor ballpark me the costs to get the house to where I would want it. See if this is doable.
Then I can worry about trying to find the right mortgage. I just don't want to lock into some higher % loan today because I am adding onto the house.
I have similar questions and wonder if anything has changed since this was thread was last updated. I want to buy a historic home that since being built was converted into a duplex. I want to turn it back into a single family home. The house is a foreclosure listed at $135k, the other houses in the same neighborhood are for sale around $300k, so I believe it to be a good value. The house appears structuraly good (just from my own view), however, because it is currently a duplex I would like to move a few walls to make it more of a SFH. I've read from the 203k streamline loan that no structural changes that require architect plans are allowed. I have around $20k of my personal money to spend on various items. I know that both the 203k and 203k streamline both have various fees involved, more so than a regular FHA loan. I was wondering about paying for the wall moving on my own and using the 203k streamline for the finishing after the wall moving was done. Does anyone have any other suggestions? I really have no idea of how much it would cost to move a few walls, none of which would be load bearing. I know some electrial and plumbing would have to be relocated as well and that permits and architect drawings are required for the city.
The house is a foreclosure listed at $135k,
the other houses in the same neighborhood are for sale around $300k...
At $135,000 this is within the range of the "all cash buyer".
Or at lest the 60-90% cash buyer.
Find an angel (family? in laws?) to buy it outright...
and then make a deal with/for you to get a traditional mortgage.
Ideally, along with the construction budget in that.
Otherwise you're spinning your wheels as some other investor type will buy it out from under you
and maybe even do your reno scheme.
hth
ps: start your own new thread rather than tack onto the end of old ones.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
