Which Mortgage is Right For Remodelers? Consider a 203k Loan!
You know exactly what you want in a house. You’ve scoped out your local market, and a couple of neighboring markets, too. You’ve kept an eye on foreclosures and auctions and done your research. There’s just one problem: nothing you’ve seen meets your expectations; the house you want doesn’t exist yet as-is.
So what’s to keep you from creating a home to suit your needs?
For those willing to put the time and elbow grease into making their dream home a reality, there is a loan option worth exploring: the 203k loan.
If you’ve found the perfect location with a less-than-perfect house, a 203k loan could be the answer to the remodel of your dreams. A 203k allows you to wrap the costs of closing on a property, the labor and materials of a remodel, and living accommodations during the remodel all into one simple loan.
Plus, 203k loans are backed by the Federal Housing Authority (FHA), which means lenders take on less risk and are a little more open to folks with less-than-stellar credit. These loans are structured to get problem properties off the market and back into the community, because nothing drives area property value down like a vacant home around the corner that just won’t sell.
It’s also worth pointing out that while buying a fixer-upper carries significant risk, there’s also the potential of instant equity. The loan can bring a certain home up to similar property values of other homes in the surrounding neighborhood, so if you take out a loan that includes an $80,000 purchase and $20,000 of repairs in a neighborhood with $120,000 homes in it, you’ve immediately created $20,000 worth of equity.
If you’re interested in finding out more about 203k go view our 203k FAQ video, or contact one of our qualified Loan Originators to help get you started today.