When it comes to trying to renovate a home, you may not be able to afford everything up front.
If you’ve been looking for a loan in order to make changes to your home, then the 203(k) loan might be right for you.
These reasons will help you figure out whether or not you really want to get this kind of loan, but in the case that you are interested then contact me or read more about the 203(k) loan or both.
Here's a quick rundown of our list:
- Reason 1 - You Need to Renovate Your Home.
- Reason 2 - You Have a Lower Credit Score.
- Reason 3 - You Have the Time to Focus on the Renovation.
- Reason 4 - You Want to Buy a Fixer-Upper.
- Reason 5 - You Need a Lower Down Payment.
Reason 1 - You Need to Renovate Your Home.
This isn’t just about wanting to renovate your home, this is about needing to your renovate your home.
If there are issues in your house that you really need to get fixed, but you haven’t found the time or money to do so right away, then this loan will be able to help you along.
For the standard loan, you can renovate almost anything in your house from the foundation to the roof.
When you go with a streamline loan, you may not be able to do as much to the structural parts to the house, but it can still help with renovating a bathroom that has had faulty pipes or parts of the kitchen that are falling apart.
The restrictions on this loan even require that you deal with the important parts first.
If parts of your house aren’t up to code, then you’ll be required to fix those before you can even start touching the rest of the house.
This is the FHA’s way of making sure that their money goes towards you having a good place to live.
The home doesn’t have to be perfect, but it has to live up to the standards that the FHA needs.
Reason 2 - You Have a Lower Credit Score.
When it comes to FHA loans, you will find that qualifying for them isn’t as difficult as it is with other loans.
You don’t have to have perfect credit in order to get this loan.
With conventional loans, it is more competitive to try and get that loan.
With lower credit, banks and lenders may think that you are less likely to pay them back or that you’re more likely to have troubles paying them back.
The FHA is made for people like that.
This does come with a drawback of you needed insurance on any loan that you get with them.
They calculate out the insurance and make sure that when you’re looking to qualify, that part of the payment is included.
However, even with the little extra payment, getting a loan that can help you change the house that you live is incredibly important.
These loans can help turn your house around and make you feel happier about your home and lifestyle.
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Reason 3 - You Have the Time to Focus on the Renovation.
While a renovation already takes some time, the kind of time that is necessary through a 203(k) loan can be a little bit more.
This may be a drawback for some people, but it just means that everything will be for sure.
You’ll need to create a proposal and gather estimates to submit to the FHA before they will give you the money.
But you’ll also be waiting to hear from the companies that you’re trying to contract.
Even if you were using a conventional loan, you would still have to wait for people to get back to you from contractors in order to get the ball rolling on your renovations.
The extra time that you spend focusing on the renovation will make sure that your home is safe and secure.
You’ll be able to make sure that you’re getting a good deal and that everything necessary gets done.
Reason 4 - You Want to Buy a Fixer-Upper.
When people go out and look at homes, it’s sometimes difficult when they find a house in the right place that just isn’t what they need.
Trying to find the money to renovate a house when you’re trying to buy one can be difficult, but that’s where the 203(k) can come into play.
This loan will allow you to get a house, even when the property is considered uninhabitable and then turn around and transform the property.
This can be great for people that want to live in a particular location but can’t find houses that are up to their standards.
Reason 5 - You Need a Lower Down Payment.
For the people that the FHA loans are intended for, being able to afford a 10 to 20 percent down payment can be a huge difficulty.
With the 203(k), if you qualify for the loan, then it’s likely that you’re going to be able to afford the down payment because it could be as low as 3.5%.
This is a great reason why so many people decide on an FHA loan instead of a conventional loan.
While the interest might be higher and the terms are less flexible, the lower down payment can really ensure that people have somewhere to live that is safe and sturdy.
What do you think?
I would love to hear your thoughts.
Leave a comment below - or, call/text me at (760) 297-4539.
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