Making Good Use of Renovation Loans
When looking at a home that needs repair, there are options. Information on the Federal Housing Administration (FHA) 203K renovation loans. View information directly on this site. http://pwr.com/30A
These loans are perfect for a bargain hunter who has spotted a fixer-upper or a foreclosure in need of immediate repair, or if you have found a home that would be ideal if only there were a third bedroom and a second bathroom.
Renovation loans provide the money to both purchase the home and finance the home ís renovation. With one loan, there is only one application, one set of fees, one closing and one monthly payment. At closing, the repair money is put into a trustee account for disbursement as repairs are completed. Improvements can include anything that adds value to the home, such as a room addition, new carpeting, landscaping, plumbing, roofing or a new kitchen. The loan can also be used for energy-efficiency improvements that qualify for tax credits* under the new stimulus package.
Another great advantage of a renovation loan is that it provides borrowers a loan based on the increased property value after renovation. But that's not the only financial upside. The required down payment on a renovation loan can be as low as 3.5%. As a tax deductible first mortgage, the renovation loan will usually feature a lower interest rate than a second mortgage and improvement costs can be spread over the term of the loan. The loan can also provide financing for up to six months of mortgage payments if the house is not occupied during construction.
Just knowing about renovation loans may make the vital difference to motivate buyers to purchase. Give me a call today to learn more about how I can refer you to a lender who can assist you with pre-qualifying you for a loan before beginning your home search.
*Always consult your tax advisor for tax information and advice.