Have you ever looked at a house and said to yourself; “I love the neighborhood, the floor plan and the lot but this house needs a lot of updating?” Well, now there is an easy way to purchase a house and get the funds to fix it up exactly how you want it all at the time that your buy. This is done by using a 3% down FHA renovation loan available through www.sandiegodownpayment.com.
First you search for a house that you want to purchase. This renovation loan will allow you to widen your search to include houses that need a little work. Oftentimes you can get a great deal on a house that is in a prime neighborhood that is being overlooked by other buyers because it needs some work. It may need for example new carpeting, new hardwood floors, an updated kitchen, an updated bathroom, etc… These are all fixes that you can accomplish with a renovation loan. Many times you can buy at a deeply discounted price in a great neighborhood, and you gain significant increase in value by just fixing low cost cosmetic items. This is a fantastic loan for a first time buyer who wants to get into their first home and begin to build equity.
Use your imagination when searching for homes. When looking at a home that needs work, imagine it with polished new floors, fresh new paint in the interior and exterior, brand new kitchen appliances and cabinets, brand new updated bathrooms. This will allow you to turn an ugly duckling into a beautiful swan.
Here’s how the loan works. First you want to get pre-approved with a loan specialist at sandiegodownpayment.com. This loan requires that the property be your primary residence. You will have to provide income documentation and have a steady job history over the past 2 years. You do not have to have perfect credit. Once pre-approved for the renovation loan you want to find a property that will work with the renovation loan. The best properties only need cosmetic fix-up, not major renovation work. Items such as flooring, kitchen updating, bathroom updating, painting interior and exterior and new windows are examples of cosmetic items. Examples of major renovation items that don’t work as well with the loan are; fixing foundations, moving walls, and adding additions. There is a loan for these items, but it is more complex and requires more time then the streamline renovation loan for cosmetic items.
Once you find a house that you would like to buy, you will find a contractor to give you a bid to do the work you would like to do on the house. You will need a licensed and bonded contractor. We can refer one to you. You will then forward the bid to your loan officer and they will include that with the processing of your file. Once you loan file is approved, the lender will fund the purchase price of the house + the costs to do the renovation all as one loan. The cost to fix will go into an escrow account for you to pay the contractor to complete the work. Once the work is complete, FHA will come out to approve the work and you will be finished. In some cases you will not have to make your first mortgage payment until the work is completed. Here is an example:
-purchase price $300,000
-renovation costs $30,000 (new hardwood floors, new kitchen cabinets and appliances, interior and exterior painting)
-total new loan: $321,000 (you 3% down of the $300,000 purchase price of $9,000 is subtracted in)
-seller get’s paid $300,000 at closing
-$30,000 stays in escrow to pay the contractors to fix the house
-you end up with a $321,000 new loan and a sparkling new house
There are many, many benefits to this renovation loan. Right now you can get 30 year fixed interest rates at near 40 year lows on these renovation loans. So you are financing the fix up costs at low rates and getting a tax deduction as you are allowed to deduct the mortgage interest on your primary residence. This also allows you to get into a better neighborhood by buying a house at a low costs that needs work and instantly building equity.
If you need a real estate agent that specializes in finding fixer upper houses, please ask the people at www.sandiegodownpayment.com for a referral.
We are in contact with the very best agents who know how to find these properties and work with this loan program.
If you are interested in learning more about fixer-upper loans and all of the hidden grants and down payment assistance programs available to home buyers in San Diego County, please contact one of our specialists at www.sandiegodownpayment.com.
You must log in to post a comment.
{ 1 trackback }