Many people are afraid whenever they hear the word "loan" because most have this notion that all debts are bad. While this may be true for the most part, there are also advantages that people need to be aware of. These advantages may be beneficial for homebuyers who are thinking of buying properties that need improvements.
How Does The 203K Loan Work?
According to real estate expert in Long Island, Kyle Kelly, 203K Loans are meant for those looking to buy homes that need improvements. Meaning, it should be for your personal use and not an investment property.
The good thing about the 203K Loan is that even if a property is only worth X today, you could highlight that it would be worth Y once all the renovations are done. This means that you may be able to ask that much money to get you there.
2 Types of 203K Loans
Standard 203k Loan
The Standard 203k Loan can be used by those who want to finance a property that needs major renovations. Homeowners or homebuyers have the ability to get a single loan for mortgage cost, plus the required repairs. This means there are no limits on the repair funds that you may receive, although, there are still limits to FHA loans.
Streamline 203k Loan
With the Streamline 203k Loan, you can buy a new home or refinance your existing home. Less paperwork is required and you can borrow the money that you need for renovations, while having one monthly payment. When getting a streamline refinance loan, there is a timeframe in which all repairs must be completed for your final appraisal. You also need a list of the recommended repairs together with a bid from a contractor.
Now, after having a general idea about 203K Loans, getting a loan doesn't sound too bad after all. It's a great tool that people can use towards their dreams of homeownership with lesser waiting time. Right now, there are more homes that seem to come in the market and knowing that you have options is something that you should make most of.
According to realtor.com, majority of home sellers are planning to list their homes within the next six months:
While it seems to be good news, it is important to take note that homes are still selling quickly, so it is necessary to get a realtor who can connect you with the right loan officer and guide you towards the best real estate options.
Working with the experts doesn't only mean that you can you can make it to the closing table fast. It also means closing the deal with little or no headaches. If you are looking for homes for sale or thinking about selling your home, reach out to The Island Wide Team to get the advice that you need right away!
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