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Use the FHA Mortgage Specifically Created for Home Improvement
Almost everyone knows about FHA mortgages. They are tailor-made for first time homebuyers and others with less than perfect credit or other financial issues. You don't have to be low income or have bad credit to use FHA, but generally the loan limits prohibit high priced homes.
What you may not know about FHA is that there is a special loan program designed to provide the funds to buy or refinance your home PLUS additional funds to make repairs or improvements.
This FHA mortgage is called the 203K and the K is the operative part of the name. Not every lender participates in the rehab loan program, but the major national lenders do. If the loan officer you contact is unaware, then call the corporate office and ask them to direct you.
The FHA 203K loan program calls for an FHA inspector to go over the house, using the plans you gave him. Before you get to this inspection phase, you should be working with a general contractor who understands how to provide plans and specs for a project. Plans and specifications are standard in the contracting industry for anyone managing a project >$5000, which is the minimum rehab amount for this loan program.
The FHA inspector will decide if the project is feasible, depending on whether there is additional work required to bring the property up to code, and whether or not the property will appraise for enough to make the project "worth it". FHA is willing to lend based on the after-rehab value and will even stretch that value a little in order to get houses brought up to code.
Once the lender is happy with the valuations, the plans and specs, and the inspector's report, your loan file will be reviewed by an underwriter specially trained and certified in rehab loans. Your credit and finances do not have to be perfect to be approved, but the creditworthiness and qualifications are similar to a regular FHA loan.
One of the benefits of a 203K is that all costs can be added into the project. The fees, permits, closing costs, etc. are all added up and your downpayment on the purchase is calculated on the total. If you are refinancing instead of purchasing, the amounts are totaled the same way, but you might already have enough equity in the home to avoid coming up with any cash.
What's next? Once approved, the loan closes and the rehab portion of the money is escrowed by the lender. The contractor submits requests for payment and each phase is inspected. As soon as the work passes the inspection for completion, the contractor is paid. You can not go back to the well for more money, so your initial plan must be a good one. A contingency fund is usually added in during the total project calculation.
This contingency fund can only be used to fund hidden repairs that were not evident during the initial workup. Any remaining funds in the contingency are used to pay down the mortgage at the end of the project.
The FHA 203K mortgage is not a "piece of cake", but if you do not qualify for low cost money at the local home improvement equity loan bank, then it is very definately worth looking into.
Pool Supplies Should Also Contain Safety
A swimming pool with attached spa has just been installed in your backyard. Now you are ready to invite your friends for a big splashy pool party - or are you? Do you have all of the pool supplies you need to maintain your new fiberglass pool? Do you have the chemicals, pool toys, covers, automatic cleaners, pool heater, ladders, liners, slides, diving boards and on and on? You can see pool supplies can add up quickly.
Dual Pane Window Glass Repair
For the past few weeks, I have been explaining how to repair a broken window pane in your home. But, what if you have dual pane windows? Is the process the same? Well, pretty much, except for a couple of variations.
Use Ladders Safely
The Consumer Product Safety Commission reports that each year more than 511,000 people are treated for cuts, bruises and fractured bones from improper use of ladders. More than 300 people a year die from ladder related injuries.
Bedding is Fashion for the Bed
Ladies, we spend a lot of time in the morning getting ready for the day. We take showers, put on makeup, blow dry our hair and put on just the right outfit we feel good in.
Keeping Your Home Spa Clean
Purchasing a home spa is a great expense; which can be easily wasted if you don't keep your hot tub in good condition. Hot tubs provide an area for you to relax and unwind at the end of the day.
Building Permits and Inspections
Probably the most intimidating part of building your own house is the permit process. Not only do the the requirements vary from township to township, but at times the decisions made seem so subjective that we find ourselves seething in frustration.
Things to Consider when Buying a Hot Tub or Jacuzzi Tub
We recently purchased a new Hot Tub and Gazebo from Cal Spas in Minnesota. The purchase was not something we planned, just something that caught our eye when visiting the Minnesota State Fair.
How to Install a Ceiling Fan - A Simple Guide
A Complete manual on how to install a Ceiling Fan may take more than just an article; it may all even take up an entire booklet. Let me just give you a simple, no-nonsense essential guide in installing a ceiling fan.
Removing Your Old Sliding Glass Door
Last week I explained how to measure your existing sliding glass door so you can order the vinyl replacement door. This week I am going to go over the steps required to remove the old sliding door before installing the new door.
Country Home Accessories
Country home décor is the most sought after home interior and it's no wonder since country décor invites a casual friendly lifestyle.Make sure you carefully study the specific style, and color scheme then carefully coordinate the colors of each element of your country décor.
Refrigerators Electric Consumption - Lower It In 15 Minutes
I recently had a customer ask for my advise about cleaning her refrigerator.I started to describe the pros and cons of different cleaners that can be used to clean the interior when she stopped me abruptly.
Door Hardware - the Focal Point of the Home
The door is the focal point of the home which is why door hardware is so important, creating a striking first impression as well as securing your property against intruders.The right door fittings and locks will enhance your property both by adding to its value, keeping it secure and improving its appearance There is a huge range of door hardware available that has been made to suit all types of home.
The Art of Gutter Cleaning
The gutters on your home are starting to overflow so it's time to clean the gutters on your home. Many homeowners do this project each year to properly maintain their homes.
The Science of Architecture
You're told to take vitamins, drink plenty of water, get a good night's sleep and exercise, but has anyone ever told you that the design of your home and office can impact your health? You wouldn't be alone in raising an eyebrow and questioning how this could be so, but thousands of years ago, the ancient seers of India spent entire lifetimes observing how man-made structures impact humans beings. Their findings were compiled into a body of knowledge called Vastu Shastra.
Natural Gas vs Charcoal Grills - Which One Is Right For You?
Barbequing outdoors is a pleasure that anyone can partake in and with so many types of grills available you can practically cook anywhere. One exception to the list is a natural gas grill which needs a permanent hook up.
Maintaining Your Hot Tub
Purchasing a hot tub is a big investment and one that should not be taken lightly. Hot tubs cost thousands of dollars and if not maintained properly they can become ineffective within just a few months.
The Benefits Of Wooden Flooring
They're affordable and come in a wide variety of styles and colors. They're easy to install and maintain.
Your Building Your Dream Home, But Where Do You Start?
You have finally found the perfect lot, in the neighborhood of your choice, and at a price you can afford. Now you have to decide what type of house you want built.
A Look at Steel Building Kits
Steel building kits are a comprehensive set of all the parts required to assemble a steel building. They contain everything right from pre-drilled holes to the bolts for joining the individual components together.
Remodel Your Kitchen or Bathroom For The Best ROI!
Trying to decide which home improvement project to tackle next? To start you must decide if you are remodeling to improve an area of your home that is in need of some TLC or if you are remodeling to maximize your Return On Investment (ROI). If a specific area in your home needs TLC then your decision is straight forward.
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