How to Have A Successful FHA 203k Renovation Loan Closing…
I’ve heard so much chatter lately regarding FHA 203k renovation loans that I thought it was time I dispelled some of those rumors floating around. Especially those pertaining to whether or not these loans actually do close!
What’s best about the FHA 203k renovation loan? You can take a home with a great or even not so great structure, purchase it at a fantastic price point, finance any repairs that are required or desired and make a home truly your own. All of this can be done in as little as 45 days!
I get asked what’s bad about the loan quite a bit because these renovation loans do get a bad rap. So the truth…well let’s talk. First of all what most people find challenging is finding the perfect contractor and deciding on what work to do and making that fit in with the budget they have decided they want to spend.
Once this part is done things start really rolling….that is if you are working with a lender who is well versed in renovation loans. I get many calls per month and loans handed over to me because the lender they are working with is not getting the loan closed. We will discuss why this is in just a bit.
The good or actually the best part about this loan is simply put…you get to buy, renovate to suite your needs all with one great low rate, one payment and very low down payment. Selling a home? Well what’s good in this case is as a seller you can sell “as is” and let the buyer renovation for their needs.
Let’s get back to working with an experienced renovation lender. How do you know? First of all you probably do a Google search and see several lenders listed. Then it’s time to do some investigating. Is there a website or blog with diverse content that will lend to their expertise? When you get the loan officer on the phone ask them pointed questions.
I am going to make this really easy for you and give you some great questions and the answers you need to hear!
Q: How many renovation loans have you done?
A: The more the better ..less than 20-30 not experienced enough. You deserve an expert.
Q: Does your company offer the Full 203k and the 203k Streamline version?
A: You need options. Would be unfortunate to get all the way to inspection and find out you need a full 203k but the lender you are working with only offers the streamline and you have to start over with a new lender now.
Q: Does your company offer the Fannie Mae HomeStyle Renovation loan?
A: Again you need option there could be many reasons why the HomeStyle Renovation loan might just work better for you. Especially if you have some money for a down payment or want to avoid mortgage insurance.
Q: Does your company underwrite, close and fund in house?
A: YES is the only option. If they do not underwrite and close/fund in house that means they are brokering your loan to another lender and that is NOT good for this type of loan. Way to many moving parts with a renovation loan.
Find a lender that can answer the above and you are on your way to a successful renovation loan and closing experience. Or just call me because repairs don’t scare me and they shouldn’t scare you either!!