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This type of loan is a great option for buyers considering purchasing a bank-owned property. They can get the money they need to purchase and fix up the home. The buyer's downpayment is only 3.5% of the total costs (plus normal closing costs). It's a great vehicle to help get rid of the excess inventory out there.
A close friend of mine, whenever he brings up the 203K loan with mortgage brokers and realtors, they really balk at it and try to discourage him from using it. It seems ideal for him (as a prospective first time buyer who likes old houses but doesn't have the funds to buy and fix them). Even the "streamlined" 203K gets shot down. There are many lovely old houses that need some work. What can he do to convince the real estate professionals with whom he is working ?
This type of loan is a great option for buyers considering purchasing a bank-owned property. They can get the money they need to purchase and fix up the home. The buyer's downpayment is only 3.5% of the total costs (plus normal closing costs). It's a great vehicle to help get rid of the excess inventory out there.
A close friend of mine, whenever he brings up the 203K loan with mortgage brokers and realtors, they really balk at it and try to discourage him from using it. It seems ideal for him (as a prospective first time buyer who likes old houses but doesn't have the funds to buy and fix them). Even the "streamlined" 203K gets shot down. There are many lovely old houses that need some work. What can he do to convince the real estate professionals with whom he is working ?
I can't think of a good reason for a real estate agent to shoot the idea down. Perhaps it's that they don't understand the loan program, and don't want to bother learning. As to the loan officers, they may shoot it down because it's an FHA program that can only be offered by FHA approved lenders.
It's a good program, and useful to people in the right circumstances. Is your friend planning to live in the house? (It's can't be used by investors, only owner/occupants.) There are some rules that you need to make sure are followed, mostly regarding timeframes for completion of work, and that sort of thing. Good luck.
This is interesting. What exactly is a 203K loan and how does it work?
The 203(k) mortgage program lets you borrow enough money to buy a house AND complete renovations & repairs on that house with the same mortgage. It's a multi phase process. First you have to get approved for the full amount of the mortgage including those anticipated repair costs. The appraisal looks at the house in it's current state, and then takes into account the value when your anticipated repairs & renovations are complete. When you close on the house, enough money will be released for the purchase. As you complete the work, and provide documented proof of having done so, further monies are released to reimburse the cost of that work. These loans can be arranged by any FHA Approved lender.
That's a very basic primer of 203(k) loans. You can get more info from the FHA at this site (http://portal.hud.gov/portal/page?_pageid=73,1827600&_dad=portal&_schema=PORTAL - broken link). That page also includes a link so you can find an FHA approved lender in your area.
my realtor was the same as your friend; his reason was because I was a first time-buyer and kept pushing to look at new properties that I was not interest in.. He would say as a first time buyer when you start knocking down stuff, it creates so many problem that most first time buyers are not ready for....
I can't think of a good reason for a real estate agent to shoot the idea down. Perhaps it's that they don't understand the loan program, and don't want to bother learning. As to the loan officers, they may shoot it down because it's an FHA program that can only be offered by FHA approved lenders.
It's a good program, and useful to people in the right circumstances. Is your friend planning to live in the house? (It's can't be used by investors, only owner/occupants.) There are some rules that you need to make sure are followed, mostly regarding timeframes for completion of work, and that sort of thing. Good luck.
Bill is right about those who shoot the 203K down are those who dont understand it. 203K is a great program, especially if you are able to do much of the work yourself. I have done the 203K three times and the outcome was great.
On the other hand I dont recomend buying a home now no matter how good it sounds. We have 2 or more years of diving home values before it levels off. It would be suicide to buy now.
yep, 4.49 million people committed suicide last month
Correct. 4.49 million homes sold last year.
Which is 23% less then 2007, and 27% below 2006, and another 12% from 2005. Add that up. Now consider how much more value our homes will lose in 2009 and 2010 and beyond. It's anyones guess but experts are saying as much as 35% more this year.
And due to America having a higher percentage of foreclosures now then we did in 1928 and because so many people are losing their jobs, yes suicides are measurably going way up.
Thumbs up to you for thinking positive and defending your own home purchase at such a bad time but you will lose. Mark my words.
defending your own home purchase at such a bad time but you will lose. Mark my words.
nope, sorry pal -- I love my house, and as others have said in various threads: our houses are where we live, and make memories. if the house appreciates in value, great... if not, that's OK too
I harbor no ill-will towards renters, some of you have no choice but to rent, others do so at their own choosing. You say toe-may-toe, I say toe-mah-toe...
I have found a property that I would like to purchase in northwest NJ that would qualify for a 203(k) loan, however the link for approved lenders on the FHA site does not work. Can someone recommend an approved 203(k) lender?
Also, I would be interested if anyone can recommend a consultant.
Thanks.
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