THE FHA 203k Renovation Loan Program
I work with a lot of First Time Home Buyers throughout St. Charles, St. Louis and the State of Missouri helping them secure financing for their first new home, and I enjoy it quite a bit. There are always specific questions that I get when I initially start working for a First Time Home Buyer, one question I am asked a lot is; what are the best first time home buyer programs? My standard answer is, there isn't any first time home buyer programs, but that answer isn't entirely true.
There are several mortgage programs that are geared toward the first time home buyer, the three that come to mind is VA, USDA/Rural Development and FHA. There use to be a conventional mortgage program that was intended to work with first time home buyers but that program is near impossible to get in today's ever tightening environment.
So why are these three mortgage programs so good for first time home buyers in St. Charles and St. Louis and Missouri? They supply the means to help a first time home buyer get a new home through reduced to no down payment requirements, lower credit qualifications and higher qualifying ratios. Most first time home buyers do not have money to readily provide for down payment, have not had enough time to build an established credit history, and are not at the peak of their earnings cycle.
The USDA/Rural Development and VA mortgage program provide a zero down payment and zero mortgage insurance loan program that is very attractive to first time home buyers. The down side to these programs are; you have to be either an eligible service veteran or willing to live in the rural portions of your state to qualify. There are other qualifications to these programs and if you would like to learn more I encourage you to visit my website at www.bobrutledge.com.
That leaves FHA for the majority of all First Time Home Buyers in St. Louis and St. Charles MO, and all in all FHA is a great mortgage program. There is a low down payment requirement of 3.5%, that can come from many different and unique sources. The FHA mortgage program has lower interest rate requirements than any conventional mortgage, great interest rates, and much easier credit and ratio qualifications.
DID YOU KNOW?
In the State of Missouri they have a great First Time Home Buyer program that provides a no cost down payment assistance and/or super low interest rates. Also, with FHA there are 24 different recommendations and methods within their underwriting guidelines to secure the funds necessary to close your loan. Visit my web site at www.bobrutledge.com to get free information.
The FHA 203k Renovation Loan is the Best Mortgage for First Time Home Buyers!
Why? You are out looking for your new home in St. Charles, St. Louis or the surrounding area, you have found that perfect home, really it is that 'almost perfect' home. It is located in the right location, the right school district, it is priced well below market value, there is too much to like about the home except for one big issue, it needs a little to a lot of rehab work to make it the perfect home.
Unfortunately, in today's home market all around the St. Louis and St. Charles area this is what many first time home buyers are running into, with foreclosures and bank owned properties being more the norm than ever before many of the homes listed for sale need some work done to them to make then livable or worthy enough for you to buy.
The FHA 203k Renovation Rehab loan is the answer that many first time home buyers have been turning to as the answer to this problem. The FHA 203k mortgage will turn your fixer upper into the castle you want.
The FHA 203k is fast becoming a very popular option that will allow you to finance the cost of the repairs, renovations, rehab work into your new mortgage. The financing for this home loan will include the purchase price of your new home plus the improvements you are either required to do to be able to live in the home, or what you want to do, such as upgrade the kitchen, bathroom, add or enlarge a garage, new flooring, pretty much anything you can think of can be done.
Think of the FHA 203k home loan as a one-time construction loan. At closing, the seller receives their money and rest is put into an escrow account for you to use for the rehabbing and renovation of your new home.
Bonus for The First Time Home Buyer!
Many of the first time home buyers I have been working with I have coached to work closely with their real estate estate to find that near perfect home that needs some fixing up that will create huge rewards shortly after they purchase the new home.
There are many homes listed for sale today that are priced well below their true value, mostly because the home is involved in some form of distress sale and needs works to fix damage to the the home. This is unfortunate to the seller and the housing market but it is your advantage.
I advice many of my first time home buyers to search out these types homes, have your real estate agent provide you a thorough and extensive Comparable Market Analysis (CMA) of the homes value after the repairs and renovation work has been completed, and what many of them are finding out is that these bargain homes are filled with a ton of equity once the work is completed.
A recent client bought a new home, much bigger than they ever thought possible, at a sales price of $121,000, they and their contractor estimated the repair costs would run them about $25,000 to $30,000, making for a home loan of about $151,000. tops. The CMA their agent provided to them proved to them that their new home was going to be worth over $2000,000 after work completion.
Imagine buying a new home with a 3.5% down payment and within a few months having over 25% equity in your new home! WOW! Please, keep in mind that this isn't an every time situation but gaining a large new equity stake in your home happens more often than not when first time home buyers utilize the FHA 203k mortgage and a little extra home work.
If you would like to learn more about the FHA 203k Renovation mortgage program I encourage you to please visit my web site at www.bobrutledge.com. There you will learn everything necessary regarding the FHA 203k home loan.
If you would like to ask me more question about this great loan program please feel free to contact me. My name is Bob Rutledge I am a Certified FHA 203k Mortgage Loan Officer with Prospect Mortgage the #2 FHA 203k lender in the country.