This week’s MORTGAGE TIPS: The FHA 203(k) Mortgage

Purchase and Renovate: Recapture the American Dream

Pick appropriate ladders

Often times home shoppers will come across a fixer-upper property that just fits the bill; perfect in every way except that it needs just too many costly repairs to bring it up to acceptable condition. And what’s worse, the buyer has little or no money to pay for the needed renovations. Now there is a way to make it all possible: It’s the FHA 203(k) mortgage. With a 203(k) loan, your buyer can purchase a property in need of repairs and refurbishing and roll the renovation costs into one, easy mortgage loan based on the home’s post-improved value.

For example, if they wanted to buy a house in which the kitchen had been torn out, they could include in the mortgage loan, the cost of new cabinets, counter tops, flooring, a refrigerator, stove, oven, microwave, sink, dishwasher, garbage disposal, and the cost to design and install it. Plus, get up to six months of mortgage payments included in the loan to cover the mortgage payments while they’re renovating.

Floor plan before kitchen renovation

And the down payment terms are extremely favorable too – they only have to come up with 3.5% of the home’s purchase price and repair costs. For example, if they were buying a house that cost $150,000 and the repairs cost $15,000, their down payment would be just $5,775.

If you have a buyer shopping for a home and seriously considering a property in need of repairs and updates, the 203(k) mortgage can really simplify their purchase. Just make sure that you work with a mortgage lender who is experienced with the 203(k) program.

You can learn more about the 203(k) loan and other FHA loans by contacting an FHA-approved lender. To find a qualified lender in your area who is experienced with FHA 203(k) mortgages, visit online at http://www.hud.gov

## #

April 13, 2012

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s