Foreclosure, short sale, foreclosure, short sale does it seem like every other house is either a foreclosure or short sale that require some kind of repair or repairs. Well the 203K loan is available to help in many cases. Which 203K loan applies, the streamline or the full blown. The streamline again is that which requires up to $35,000 in repairs, while the full blown is anything over $35,000. The lender usually assist in this factor after the FHA inspectors conducts their inspection of the property and with choosing licensed and boned contractors.
Many ask how is the 203K cost effective and what are the cost associated with it. The interest rate is usually higher than the traditional FHA loan. Here's how it is factored into the loan. For example you buy a house worth $300,000 and the repair cost total $30,000, your loan is based on $330,000 even though you bought the house for $300,000, so this means your appraisal is based on the house itself before the repairs.
203K loans are very convenient for 1st time buyers who do not have the resource to pay the out of pocket costs that's associated with fixing up a house. Unfortunately many homeowners who houses went into foreclosure felt like they've invested money and don't want the next homeowner to receive their investment. So many purposely damage the house. This is why many foreclosures are so damaged.
Short Sales properties are not as often damaged like foreclosures are. Due to the fact that the homeowner either still live in it or just want to get rid of the property. The cost associated with many short sales is that of wear and tear over time. Or factored to many homeowners due to affordability and are unable to keep up with the maintenance but Short Sales are usually still in far better condition than foreclosures.
203K loans are very good resources for fixer uppers or just any home in today's Real Estate market. One key factor is once the appraisal is done the appraisal has to approve the property for a 203K loan. Just because someone wants to replace the stove & refrigerator is not justification for doing so. Always consult with a lender especially one who has experience with 203K loans so you have a rewarding experience.
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Damon J. Brockenberry (Damon The Agent)
Washington DC Area Real Estate Specialist
Servicing Washington, DC, Maryland, & Virginia
cell: 240-694-6460 e-mail: sold@damontheagent.com
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