Firehouse Mortgage offers professional mortgage brokering services to homebuyers in Houston Texas. We strive to attain the highest level of customer service satisfaction and trust.
When buying or refinancing a home in need of repairs or renovations, many soon-to-be homeowners choose the FHA 203(k) mortgage option. This option allows buyers to roll the expense of the renovation repairs into the home mortgage for up to $35,000 worth of repairs for a streamline 203(k) loan and standard 203(k) loan for repairs that exceed the $35,000 limit.
This loan, also known as the rehab loan, can be financed for a 15 year fixed rate, 30 year fixed rate, or an adjustable rate. Rolling your home loan and renovation expenses into one can be greatly efficient and beneficial when securing financing for one loan versus multiple loans to get the job done.
Purchasing a fixer-upper or home that just needs a few upgrades are more common than you may think. For those who love to purchase homes with the sole purpose of flipping them, can actually turn a great profit depending on the housing market at the time. Some improvements can greatly increase the value of the home and improve your living space while other improvements can be for the sole purpose of modernizing your home. Other home improvements can be done for the purpose of energy efficiency.
One of the major qualifications and restrictions of the FHA 203(k) loan is specifically how and what type of renovations can be done. Here are some primary examples of what type of repairs are allowed versus not allowed:
An FHA 203(k) loan can be greatly beneficial for future home owners who truly enjoy renovation projects or see potential value once a home has been moderately upgraded. Some of the other benefits of this type of loan is the lower down payment requirements and competitive interest rates. When comparing the interest rates of this type of loan versus high interest credit cards, you can save your money in the long run. Some of the drawbacks are your 6 month time limit to get the repairs done, as well as being limited to specific FHA approved contractors that must be used to complete the home related fixes.
How can you qualify? Your credit score is preferred to be 500 or above. Higher credit scores can of course mean better rates and also qualify for less of a down payment. Another qualification is that the residence must be your primary residence. This type of loan is not used for vacation homes, investment property or other types of residency. Another important qualification for an FHA 203(k) loan is the amount of the loan cannot be greater than the FHA loan limits for your county. It’s always best to check with your lender first, to be sure on what these limits are.
Whether you are upgrading your current home by refinancing, or purchasing a new home to turn into a beautiful masterpiece, call Firehouse Mortgage today to speak with one of our highly qualified loan officers today. We work fast to get you into the home you love and deserve!
Firehouse Mortgage offers professional mortgage brokering services to homebuyers in Houston Texas. We strive to attain the highest level of customer service satisfaction and trust.
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Consumers wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the texas department of savings and mortgage lending, 2601 north lamar, suite 201, austin, texas 78705. Complaint forms and instructions may be obtained from the department’s website at www.Sml.Texas.Gov. A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.Sml.Texas.Gov.
