Quite a number of people find the idea of buying an old and poorly maintained home and refurbishing it into a great place appealing. However, the reality of buying a fixer upper and turning it into a dream home can be very harsh. There are times when after purchasing a home, you may find out that you cannot even afford the cost of refurbishing it. The situation becomes even more complicated when you realize that mortgage lenders are unwilling to give you a mortgage for the home because they consider it uninhabitable. In case this has happened to you, you need to start thinking about FHA 203k Rehab Home Loans.
What is the FHA 203 rehab loan?
This is a loan that is issued by the federal government. It is supposed to assist the homeowners that want to buy a ruined or aged home and refurbish it. For instance, if you need to buy a home that needs bathroom and kitchen remodeling, the FHA will give you the money to finance the purchase of the house and do the needed renovation. They will also give you a contingency reserve that can be up to 20 percent. The reserve will help you complete the renovations in case they run over the initial estimated budget. Another thing that comes with the loan is a mortgage repayment policy that allows you to stay in another place as you remodel the home.
What types of remodeling are parts of the deal?
There are 2 types of rehab loans. The first one is the regular 203k. This allows the homeowner to make structural changes to the home such as getting a new roof in place, adding a room and other adjustments. The second is the streamlined 203k. Under this arrangement, the homeowner is able to get money to finance repairs such as repainting and getting new appliances.
How much money can one get?
The amount of money that you get depends on whether you need a regular or the streamlined 203k. The total amount will depend on the value of the home and estimated repair costs.
Those are the things you need to understand about the FHA 203k Rehab Home Loans. In case you have spotted some property that you would like the buy and refurbish, visit Village Mortgage through their website
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Village Mortgage Company, NMLS #6331 CT #6331, RI #6331, ME #6331, Licensed Mortgage Lender NH #6331, Mortgage licensed lender in MA ML6331.