Simple Guide to the 203k Renovation Loan

If you’re out looking for a home, you’ve probably noticed that inventories are tight: there are not as many homes available as you would like, and the homes in good locations at the right price will go fast, often with multiple offers. Similarly, there are many homes that sit on the market for a long time due to their condition: perhaps due to the home not being updated in many years, or due to a physical problem with the home that needs to be fixed before occupancy. In these cases, a simple fix for this problem is the renovation loan. Buying the Ugly Duckling Sometimes, it makes sense to buy what many would call the ‘ugly duckling’ – a home that needs some updating or several repairs. An updated home in a good location will often be very expensive, and a discounted ‘ugly duckling’ home can be a better financial…

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Renovation Loans: Pre-Approval Process

Today we will talk about getting pre-approved, or pre-qualified for a renovation loan. Whether you’re consciously deciding whether to buy a home that needs renovation, it makes sense to select a lender that specializes in renovation loans. Buyers often will find a home that is in the right location and looks great, but needs some work, or may not be approved without doing some work to the home. In other cases, buyers will often get a home appraisal that reveals work needs to be done to the home, and they will not be approved unless that work is done. Catch 22 Sometimes buyers are not aware of work needing to be done to a home until an appraisal is done, in which case they may need extra cash for repairs and will not approved for their loan without doing some work being done to the home. If buyers do not…

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Renovation Loans: How Long to Close

  How long does it take to close on a renovation loan? Many folks have heard horror stories on renovation loans, which often times can take 90 or 120 days to close. Realtors often discourage the use of renovation loans because they never close. However, renovation loans can close quickly when set up appropriately. Two main factors influence the amount of time renovation loans will take to close: making sure the loan officer gives good advice on an appropriate time schedule, and you doing your homework. When doing a renovation loan, you will go and find a property and get a contract on the home, and then determine what work needs to be done to the home. Once under contract, your list of repairs and upgrades needs to be priced out, which involves getting quotes from good contractors that will do the work. Coming up with a list of what…

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How To Get A VA Loan for 0% Down?

                    We will discuss VA Loans, which are 0% down loans for qualified military veterans. If you are a qualified military veteran, or an active duty Servicemember of the military, the U.S. Department of Veterans Affairs (VA) provides home loans with special benefits to help you become a homeowner. Special Benefits One of the best perks of being an active member or veteran of the military is the VA Loan, which requires you put down as little as 0% down for a down payment, without the requirement of mortgage insurance. Conventional mortgages require minimum down payment, where buyers have to pay a percentage of the home purchase price up front when buying a home. Other programs such as FHA loans reduce the down payment required, often lowering the minimum down payment to a lower percentage than conventional mortgages. Most loans under…

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How Much of A Home Can I Afford?

                  One of the first steps in purchasing a home is considering how much of a home you can afford to buy. Before you start searching for homes on the Internet or with the help of a realtor, you should have a good idea of what kind of mortgage you can qualify for, and what size payment you can comfortably afford. To help figure this out, you can start by talking to a qualified loan officer. Questions to Consider To start the process, we often ask about your goals, and try to assess your financial picture to help determine what you can afford. For example, we may discuss your work history, your employment income, any debt you may have, and your credit score. This conversation will help determine what you may qualify for, and the best options for your unique situation.  …

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How Much Cash Do I Need to Buy a Home?

                  One of the most frequent questions from home buyers is asking how much cash they need to buy a home. Answering this question can be complex, as buyers need to determine how much they can afford for a monthly payment, based on their finances, as well as how much savings they need for their down payment and closing costs. Down Payment and Closing Costs When purchasing a home, buyers need to factor in the closing costs and the costs to set up the escrows and other things that are required to buy a home. Typically the largest up-front cost is the down payment, which varies depending on the mortgage used to purchase the home. Some mortgages like FHA loans require a smaller down payment, which can often be as low as 3.5% of the price of the home. For example, when…

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FHA Chicago Area Max Loan Limits Are Officially Raised Back to their Previous Highs

Last month congress passed a bill which restored the temporary high loan limits for FHA mortgages. The news at the time was for the higher cost areas, but last week week HUD made it official and the higher temporary loan limits are now in place across the country and these higher limits  will be set until the end of 2012. This is good news for home buyers who are buying larger homes or smaller apartment buildings (2 to 4 unit buildings), since it allows these buyers to purchase with just a low 3.5% down payment, and it the more lenient qualifying standards FHA offers. It is also good for the housing market in general because more qualified buyers means a stronger and more robust market. These loan limits were originally put in as part of the economic stimulus bill as a way to increase financing options and help stabilize the…

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Chicago Area Realtors – Seminar– How to Create More Business Working With Rehab and Renovation Properties

Do you have listings that will not sell? Are your borrowers looking at an older home that need work? Do you have listings that need updating or repairs? Renovation Loans can help you sell more homes and increase your commission! Attend this exclusive event on how to sell more homes using Renovation Loans offered by Prospect Mortgage, the nation’s No. 3 lender in 203K Renovation Loan origination. Renovation Loans are ideal for buyers who want to remodel an older home or buy a fixer-upper, and YOU can benefit from this growing market! This seminar includes: Everything you need to know about selling more homes with Renovation Loans. Why Renovation Loans are EASY for Agents and buyers. Why more buyers are choosing renovation loans and need Agents who can help. How to grow your business with Renovation Loans. How to market “fixer-uppers” using attractive Renovation Loan options. Join New York Times…

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Chicago Area Realtors – Seminar– How to Create More Business Working With Rehab and Renovation Properties

Do you have listings that will not sell? Are your borrowers looking at an older home that need work? Do you have listings that need updating or repairs? Renovation Loans can help you sell more homes and increase your commission! Attend this exclusive event on how to sell more homes using Renovation Loans offered by Prospect Mortgage, the nation’s No. 3 lender in 203K Renovation Loan origination. Renovation Loans are ideal for buyers who want to remodel an older home or buy a fixer-upper, and YOU can benefit from this growing market! This seminar includes: Everything you need to know about selling more homes with Renovation Loans. Why Renovation Loans are EASY for Agents and buyers. Why more buyers are choosing renovation loans and need Agents who can help. How to grow your business with Renovation Loans. How to market “fixer-uppers” using attractive Renovation Loan options. Join New York Times…

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Chicago FHA 203k Mortgage Myth – the FHA 203k Rehab Mortgage is Capped at $35,000 in Repairs and Improvements

I hear on a regular basis from borrowers and Realtors, that they were interested in a particular home, but the home couldn’t work, or it could only be bought on a cash offer because it needed too much work. When I ask if they have considered the FHA 203k rehab loan, a common answer I hear is that they couldn’t use this because the property required more than the $35,000 of work that the FHA 203k allows. BZZZZZ. Wrong answer. There are two types of Chicago are FHA 203k rehab and renovation mortgages. One is a streamline FHA 203k, which is capped at a total of $35,000. But there is another loan, the full or consultant FHA 203k, which you can use for major projects. This loan can go as high as the FHA lending limits allow. So it is possible to buy a home for $50,000 and put $100,000…

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