Improve Your Home
Do you want to update your kitchen? Enlarge a bathroom or bedroom? Create a new addition? Whatever your remodeling project, make sure you carefully define what you want to accomplish. This will help you create a clear list of tasks for your contractor to complete on the way toward a finished project that stays within budget.
Depending on the size of your project, you might be utilizing a home equity loan or line of credit for home improvements. If you haven’t chosen which, keep in mind that a loan will provide all of the money in one lump sum, as opposed to a line of credit that provides access to money you don’t have to use all at once. Also, with the line of credit, you pay interest only on the money you use, not the entire available line.
Depending on your skill set, you might be hiring a contractor, too. Choosing one requires serious consideration beyond the price he or she quotes. Is the contractor responsive to your questions? What type of workers does the contractor hire? Does the contractor have a good track record of following a project’s timeline? These are just a few important questions. Call the contractor’s references and asked detailed questions.
Hiring a high-quality, reliable contractor for your project can result in a finished product that adds significant value to your home. Depending on your goals, the right home renovation project can help you sell your home for a greater profit and position you for an upgrade. Of course, after you sell, you always can turn to Primary Residential for fixed mortgages, jumbo mortgages and more financing options.
Key Features of FHA 203(k) Loans
- Use one loan to finance the purchase and home renovation
- You have six months to remodel/repair your house
- Standard FHA guidelines are used to determine eligibility
|Down Payment||3.5% of the final loan amount|
|Terms||30 years, fixed|
|Credit Score||620 minimum|
|Maximum Loan Limit||Yes, varies by county|
Types of FHA 203(k) Loans
If you qualify for the FHA 203(k) loan program, you can go for a Standard 203(k) loan or a Limited 203(k) loan. With a Regular 203(k) loan, the maximum amount you can borrow should be:
- The current property value, including the repair
- 110 percent of the property’s estimated value once improvements are complete
On the other hand, the maximum amount of money you can borrow on a Limited 203(k) is the home’s purchase price plus $35,000.
Benefits Offered by FHA 203(k) Loans
You’ll enjoy the following benefits when you get an FHA 203(k) loan:
- Savings – If you depend on your savings to fund and complete the repairs, you might find yourself running out of money quickly. An FHA 203(k) loan lets you hang on to your savings while the house undergoes repair or cosmetic changes.
- Great Deals – Given that an FHA 203(k) loan is great for fixer-uppers, this loan will enable you to purchase a home at a reduced price.
- Low Down Payment – You’ll be able to get a low down payment of 3.5 percent of the total home loan.
The FHA 203(k) loan gives you the opportunity to turn a house that looks a little rough around the edges to your ideal home. If you’re ready to apply for this loan program, contact us tod