Monthly Archives: July 2011

Home Buyers – Take advantage of Fixer Upper Prices with 203k Loans

Right now is a great time for any home buyer to take advantage of rock bottom fixer upper pricing on FORECLOSURE and other homes.  Investors are not the only ones who can get in on this game.  You can do it with your own home and loan all the money to do it with a FHA 203k loan.

Buyers pass up foreclosure properties that need a little or a lot of work because they don’t want to do it, don’t think they can do it or don’t think they have the money to do it.   These same homebuyers end up buying paying more money for a move-in ready home while someone else makes money from them.  THINK AGAIN – YOU CAN DO IT!

203k loans is a type of FHA loan that provides you $35,000 in money to fix up a home that you will live in – above and beyond the closing costs and purchase price of the home.  You can use the money for repairs or even just upgrades.  This can help you get into an affordable home. 

CONSIDER THIS… The average investor spends between 25-50% of the sale price of the home on improvements and usually sells it for 25-50% profit.  That’s what you can save if you do it yourself.  Any buyer is going to make some changes to a home after closing.  So, why not get the most equity and the home you want now instead of lining someone else’s pockets.  This time is unprecedented.  Lowest interest rates in history.  Corporations and governments selling fix up homes at rock bottom prices.  This combination leads to gold for buyers.  And it will not last forever.  Here is what you need to know…. 

  1. Your minimum down payment is 3.5% of the future value of appraisal – the home cost plus improvement.
  2. Closing occurs first and then improvements are completed after closing.
  3. In the case the home is not livable during construction up to six month’s rent can be financed into loan so borrower doesn’t have two housing payments.
  4. Six months is the longest a project can  take for completion.
  5. The max mortgage loan size on one unit property is $410,000 in collar counties of Chicagoland.
  6. Can be for any improvements except luxury items such as pool or furniture, etc.  But things like new cabinets or granite tops, stainless appliances, hardwood floors – that is fine – even if there was nothing wrong with the old ones.
  7. You can finance 1-4 unit primary residence properties – no condos unless less than 4 in a building. 
  8. You chose your own contractor – but it can’t be you.  Must be licensed to do work and must have experience.  Loan company pays them. 
  9. Same requirements as any other loan for qualification.
  10. Takes about 45 days to approve after application.

This is your chance to get into an affordable home or afford a home you wouldn’t have been able to.  This opportunity will not last forever.  Historically low interest rates, historically low prices, historically high inventory of homes available to chose from….  What are you waiting for?

Contact Suzanne Hamilton with RE Marketing Consultants at 888-788-9544 or suzanne@remarketingconsultants.com to find homes.  Contact Jim Walsh at Prospect Mortgage at jim.walsh@prospectmtg.com for info about 203k loans.