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Pro’s and Cons of the FHA 203k
I honestly believe that the FHA 203k renovation loan is the best mortgage product available. The loan creates amazing opportunities in ways that other mortgage products cannot. At the same time it is not the perfect loan for everyone in every situation. Here is how I weigh the FHA 203k loan looking at both the pro’s and cons:
 
Pro’s
 
·      Home renovations can include many things from windows and siding to new kitchens, additional bedrooms, bathrooms, and levels
·      It is easier to qualify for this loan. Credit scores as low as 640 and higher DTI’s are eligible
·      3.5% down payment is required. This includes both the purchase price and the renovation costs
·      The FHA 203k offers lower interest rates compare to construction loans
·      It is possible to gain instant equity on your transaction
·      The renovation and purchase costs are bundled together into one low fixed interest rate. You can even include 6 months of mortgage payments if the home is not habitable during construction
·      Loan amounts can be based off of 110% of after improved value 
 
Cons
 
·      Luxury items are not included. This means no basketball or tennis courts, ... more

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