A bank owned property in Tampa, Florida; Foreclosure sale in Clearwater, Florida; For Sale by Owner in St. Petersburg, Florida...what do they all have in common? THEY NEED WORK! If you are a buyer, a seller or a Realtor and are faced with a home that needs a little "TLC"...There's a solution! Tampa Bay Florida buyers can now utilize rehab loans.
What is a Rehab Loan?
This is a mortgage which allows a buyer to finance the cost of repairs into the purchase price of the home. Put more simply, this mortagage allows you to wrap the costs of the home plus the cost of repairs into one loan. The bonus to this type of loan is the work doesn't have to be completed at the time of closing, the work is done after the closing has occured.
How Does The Rehab Loan Work?
Say you are interested in purchasing a home that has some issues that wouldn't pass for conventional loan financing. Perhaps there are drywall issues; maybe the home needs new flooring or new windows. A rehab loan allows the buyer to have access to the funds to complete the work after closing.
Give Me an Example of a Rehab Loan:
Mr. and Mrs. Homebuyer are interested in a home in Tampa. The home is a bank owned property, thus the bank is not willing to make any repairs prior to closing. Upon inspection, the Homebuyer's find they have two walls that are missing drywall. As your lender, I will have a contractor give us a quote for the repairs and we will include that cost into the loan. After closing, the contractor will complete the repair and we will pay him from the designated funds.
Can I Use a Rehab Loan for Cosmetic Repairs?
Absolutely! With certain types of these rehab loans, you can use funds for carpet, tile, windows and even appliances! This is a perfect option for first-time buyers who are don't have the extra funds for the "feel good" home improvements. Just imagine what $10,000 or $20,000 in available funds can do to that special home!
I need to sell my house, can my buyers consider a Rehab Loan?
It's very possible. The biggest factor is what type of work needs to be completed. When we send out our appraiser, the appraisal is done on a "subject-to-repairs" basis. As long as your home will appraise for the purchase price + repairs once they are done, then this could be a great option for you! Feel free to contact me if you are interested in offering this option to buyers.
How Do I Find Out if I Qualify for a Rehab Loan?
It's easy to find out if you qualify. If you are interested in purchasing a fixer-upper property in Tampa Bay, Clearwater or St. Petersburg and need a way to finance the cost of the repairs, contact me at LRoss@Amerifirst.com for a complimentary pre-approval.
~Visit my Tampa Mortgage Blog for more information on Rehab Loans