Today we’re going to talk about Renovations Loans and how they can be very effective when purchasing a home with needed repairs.
You found the perfect home, you’ve got a great price on it, but there’s some repairs that are needed. What do you do when you’re in that situation? Well, the answer is a renovation loan.
Here’s a story for you. We had some customers a couple of months ago, and they were out looking for houses for weeks on end. They found the perfect house, but it needed repairs. It had some repairs that weren’t gonna be done by the seller. There just wasn’t enough room in the negotiations to do that. The real estate agent negotiated a really good price for the house, and when we get the appraisal, there’s some repairs that need to be done. What do you do in that case? Well, the answer is a renovation loan.
Renovation Loans are pretty simple, and very effective in helping you meet your homebuying needs. First, get your contractors bids/prices for the repairs, and get that information to me. We’ll change this loan over to an FHA 203-K or a homestyle renovation loan. On the 203-K program, you can finance up to 110% of appraised value. So in the scenario last week, the house that our buyers ended up purchasing had a negotiated contract price of $150,000.00, and the appraisal came in at $150,000.00. That means when we start this transaction, we can base our loan amount off of $165,000 so there’s more money in the transaction to do those repairs and get that house up to the standard of living that you want. You can get it painted, new carpet, flooring, that sort of stuff taken care of. So the renovation loan is a great product, and we’re doing tons of them.
If you think a renovation loan is something you could benefit from, feel free to give us a call at 254-231-0597 and we’ll be more than happy to help you with this.
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Fairway 365 Branch Manager
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