203K loan worth it?

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We have 110k mortgage pre-qualified. Not too much, but .. This is our first home. We found home we fell in love. The location is great, has the potential to be a beautiful home. But the reality seems shit (excuse my language) But we still want that house. Room like this is worth 145k in this area, and it sold for 74k right now! Earth itself, that house is worth 50K, but we have to worry about 203K loan, and remodeling. Is it useful to do all this for the first time home buyers? I think if we get a loan to renovate the house and we have equity now. Then I just made no sense, or is this a good idea? Our friend is a professional appraiser, so he knows whereof he speaks, that houses worth more than 74K, even more than 100K. I’m just afraid that this kind of investment, and prices are not the first time home recommendations ostjad.Kõik 203 (k) loan is a detox at home:) sorry for segadust.Tahame 203 ( k) loan to remodel the house, I guess it would be about $ 20,000. Both the price of the house is still below the estimated market price (about $ 95,000), 203 (k) money is not the name of the loan.

  1. Reply
    GI Jane
    February 20, 2011 at 5:33 am

    You’re only pre-qualified for 110k.. I’m confused :/ where’s the other 93k coming from?

    EDIT: lol Oh I see!! Sorry about that 🙂
    I’ll let link take this one, he knows this stuff much better than I do – obviously lol.. good luck

  2. Reply
    February 20, 2011 at 6:23 am

    Your hesitancy is very wise. In my experience the last thing a first time home buyer should do is buy a fixer-upper unless they are actively working in the building profession. Most first timers, like many others, want their home to be a place of comfort and when the home is a “work in progress” that comfort does not exist and can potentially put a great deal of stress on a relationship (people get divorced due to this situation all the time). There is no doubt that such an endeavor could turn quite profitable, so like most other money making propositions there is risk involved. Personally, I say go for it!!! But your decision must be a mutual well thought out one between you and your partner in crime.

    If you do decide to move on the FHA 203(k), don’t go in blindly. If you can it is best to invite the experts to see the house with you so they can give you some hard estimations of what it will take to fix up. These numbers will provide you a better standing to negotiate with the seller. My only word of warning is to make sure you understand how the money improvement money can be spent for your time versus having to hire others. Good Luck

  3. Reply
    February 20, 2011 at 6:28 am

    I’m a 203(k) Consultant in Central MS.

    My advice is to get professional help. You’ll need:
    * a loan officer that regularly works with 203(k) loans
    * a consultant like myself who can help you assess the property and it safety
    * a qualified contractor who regularly works with this type rehab

    There are many issues to address “before” you sign a sales agreement. First and foremost, have a professional home inspector render an opinion. After you decide to purchase call in the consultant (that may be the same individual) begin forming a formal estimate and specification of repairs (don’t forget your wish list of items). The consultant will help determine the mandatory repairs in preparation for the FHA appraiser’s determination of value.

    I hope this gets you started, contact me if you need more help and yes, the 203(k) loan is worth it. I have worked with dozens and dozens of homeowners who have successfully renovated using the FHA 203(k) Loan Program.

    Gary Smith
    203(k) Consultant – Mississippi

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