What is FHA 203k Loan
203k loan is a program offered by the federal government to help individuals who want to rehabilitate or revamp a damaged home. It can also be used to purchase a new fixer-upper property and roll the repair costs into the loan.
FHA home loan has become popular over the years because it has helped many potential buyers realize their dream of home ownership with sensible mortgage rates, flexible credit requirements, and low down payment. The 203k loan follows the same guidelines and requirements with an added benefit of allowing the buyer to purchase a house and customize it according to his needs.
203k Loan Benefits
Low Interest Rate. Since this program is backed by FHA, you have the advantage of getting a lower interest rate on the loan. Most of the rehab loans in the commercial marketplace are quite expensive. With 203k, you can be assured that you are getting a fair interest rate.
Savings. Since the cost of repair is incorporated into the loan amount, you can hang-on to your savings when purchasing a fixer-upper house. If you’re just dependent on your savings to finance the repairs, you could run out of money very quickly.
Great Deals. 203k loan is designed for fixer-upper property. This means you can qualify for a home purchase that other programs would not. You can buy a foreclosure or an “as is” property at a much lower cost that you normally would on an open market.
Just like any other refinance mortgages, there are certain guidelines to follow and requirements to comply before you can get approved of 203k loan. It is imperative to find the right lender and loan officer because not all loan officers or lenders are adept at handling rehab loans. Furthermore, FHA 203k loan requires more paperwork; working with an expert will hasten the approval.
For more details about 203k loan, visit www.cfs203k.com.