Fixer Upper Mortgage: FHA 203K Loans
If you’re thinking about purchasing a new home through the FHA Loan Program, be sure to fully explore your options! While you can easily just buy a home that is not in need of any repairs, the FHA Renovation Loan Program allows you, as a borrower, to have a few more options for purchasing homes in any location. Unlike the USDA Loan Programs, which require the home to be in a rural location, the FHA Loan Program has no restriction on area. The FHA Loan Program allows borrowers the flexibility to add more possible homes to their shopping list, all while keeping them very affordable.
FHA 203K Advantages: Government Backed Loan
Purchasing a home that needs repair offers plenty of benefits. One of the main benefits is the fact that the FHA 203K Loan Program will roll in the costs of renovation in the home being purchased, and that these renovations must be made before the sale of the home is finalized at the closing table. Because the FHA 203K Loan Program is a government backed loan, these homes must also pass sanitary and safety regulations set by the Federal Housing Administration before they can be sold. This guarantees that you will be receiving a home with all the required work done prior to purchase and will have a fully renovated and safe place to start a new life of homeownership.
Renovating Is Very Cost Efficient!
Another benefit to choosing the FHA 203K Loan Program and purchasing a home that needs renovations is the fact that the costs of repair are rolled into the mortgage. While this initially sounds like it would cost more money, the initial purchase price of homes that need repair are usually much lower than turnkey homes on the market. This is because the owner is willing to sell the home “as is,” while not wishing to be responsible for any repairs that are needed. Luckily, the repairs can be taken care of while the additional costs are being rolled into the loan, benefiting you as the home buyer!
You Can Pay Your Future Self By Adding Your Personal Flair!
Another one of the biggest advantages is the fact you are adding value to your home before you even purchase it. By upgrading multiple areas like bathrooms, kitchens, decks or patios, you are adding those enhancements to your home. This would be a very strategic way to get the most out of a possible cash-out refinance later on down the road, putting even more money back into your pocket upon receiving a favorable appraisal to determine your home’s new value. Alternatively, if you’re looking to eventually purchase a new house altogether, selling your previous home that now has recent upgrades will increase the selling price as well. Not only do you save money by choosing to purchase your home with a FHA 203K loan, but you also make money in equity after the renovations are completed! And even more, you are paying yourself to upgrade your home to your liking!