When shopping for Chicago Area renovation loans and FHA 203k renovation loans, what questions should you ask your lender to be sure they are qualified and ensure a smooth process? Renovation loans are popular because they are flexible: you can take a property in need of a lot of work, and turn it into a good-as-new home, or find a home needing minor updates and make it the way you want.
Checking Lender Experience
While many lenders say they do renovation loans, it is important to find out how many they’ve actually done. One of the most important things to determine is the amount of experience your lender has with renovation loans. Renovation loans are different than traditional mortgages. Not only does the borrower need to be approved, but contractors doing the renovations need to be involved as well. Everything that needs to be done at specific points in time needs to be tracked so things go as smoothly as possible. If your lender hasn’t done many renovation loans they will be learning in the process of helping you, which can cause problems and make the situation more stressful.
Checking the Lending Company
In addition to asking about your lending officer’s experience, check into the experience of the lending company to see their experience with renovation loans. A lot of renovation loans are done with brokers, meaning the loan officer is packaging things up and sending them to a third-party investor. In these cases, the investor goes through everything and the lender doesn’t have control of the overall process. Alternatively, when the investor and processor are in-house, lenders will have more control over the whole process and do not need to track as many little things with third-party investors and processors. An in-house team makes for a simpler, more transparent loan process for you.
If you have any questions about renovation loans and the lending process, contact Pete Thompson, your Chicago area mortgage guy, at (630) 481-7188 or visit www.PeterThompson.team.