Home Improvement With FHA 203k Loans In Buying Fixer Upper

Home Improvement With FHA 203k Loans In Buying Fixer Upper

This BLOG On Home Improvement With FHA 203k Loans In Buying Fixer Upper Was UPDATED On February 19th, 2019

Many homeowners outgrow their current homes and think about selling their home to a bigger home. Home Improvement With FHA 203k Loans In Buying Fixer Upper is very popular. Home Improvement With FHA 203k Loans In Buying Fixer Upper only requires 3.5% of the after repaired value.

  • There is a lot of stress and cost involved in selling a current home and moving to a larger home
  • Selling current home and buying a bigger home is a process
  • There are also many costs involved such as realtor’s commissions and furnishing new home

Qualifying For Home Improvement With FHA 203k Loans

Qualifying for a mortgage loan is another important thing to consider.

  • Need to sell a home first in order to qualify for another home
  • Or can borrower qualify for both mortgage loans
  • If cannot qualify for both mortgage loans, then need to time the sale of a current property with the purchase simultaneously
  •  Another option a homeowner who needs more space has is doing a major home improvement to their existing home
  • Many consider home improvement where instead of buying another home, they consider improving their current home by doing a room addition and updating their whole house

Staying at current home and renovating it can be done by refinancing with an FHA 203k Loan. All the borrower needs to do is to qualify for an FHA Loan. Gustan Cho Associates has no lender overlays on FHA 203k Loans.

Things To Consider When Considering Doing Major Renovations

Again, doing major renovations to an existing home requires a lot of planning such as hiring an architect to do the plans and hiring a general contractor.

  • Construction can take months and need to consider living accomondations
  • Is a homeowner going to live in the home while it is being renovated? 
  • Is a homeowner going to live with friends or relatives or rent a temporary furnished home?
  • Or is homeowner going to stay at the home while renovations are being done

Things To Consider When Deciding Home Improvement With FHA 203k Loans

One of the major things homeowners need to keep in mind when deciding on an extensive home improvement project is that they do not over improve.

  • Having the biggest home in the neighborhood or the area is not a good idea
  • Homeowners who have a $1,000,000 home in an area that the median housing value is $500,000 is not a good idea
  • This is because they will get into problems when it is time to sell their home or when it is time to refinance
  • If homeowners decide to sell their home and the home buyer orders an appraisal, the appraiser will have a hard time getting an appraiser to appraise home for $1,000,000 if there are no comparable sales

Do Not Over Improve Home

Homes that are unique and overly priced for the area will have a difficult time for an appraiser appraising it.

  • These types of homes are called White Elephants
  • The only way they normally sell is from a cash buyer
  • Homeowners will also run into problems refinancing it
  • Refinance mortgage loans require an appraisal
  • If an appraiser will have a hard time getting comparable sales to home, owners will have a difficult problem in refinancing a property

Homeowners who decide to do major home improvement to an existing home, it is fine as long as they do not over improve for the area.  Having the best most expensive home in the area is never a good idea.

Borrowers who need to qualify for FHA 203k Loans with a direct lender with no mortgage overlays, please contact us at The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

By Gustan Cho

www.gustancho.com

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