FHA 203k Loans: Purchase An Existing 1-4 Unit Dwelling To Renovate, Purchase And Move An Existing Dwelling To Another Site, And Renovate An Existing Residence

10 09 2012

CALL 800 385-3503 FOR FHA 203K RENOVATION LOAN INFORMATION

This program can be used to accomplish rehabilitation and/or improvement of an existing one-to-four unit dwelling in one of three ways:

  • To purchase a dwelling and the land on which the dwelling is located and rehabilitate it.
  • To purchase a dwelling on another site, move it onto a new foundation on the mortgaged property and rehabilitate it.
  • To refinance existing liens secured against the subject property and rehabilitate such a dwelling.

To purchase a dwelling and the land on which the dwelling is located and rehabilitate it, and to refinance existing indebtedness and rehabilitate such a dwelling, the mortgage must be a first lien on the property and the loan proceeds (other than rehabilitation funds) must be available before the rehabilitation begins.

To purchase a dwelling on another site, move it onto a new foundation and rehabilitate it, the mortgage must be a first lien on the property; however, loan proceeds for the moving of the house cannot be made available until the unit is attached to the new foundation.

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm





FHA 203k Renovation Mortgages Allow Homebuyers To Purchase Or Refinance And Rehabilitate The Property With One Loan

20 08 2012





U.S. Home Sales Fell 0.8% In June To Annual Rate Of 4.77 Million Homes As First-Time Homebuyers Fall To 31% Of Total And Purchase Cancellations Rise To Record 16% As Appraisals Come In Low

20 07 2011
  • Home sales fell 0.8% in June to a seasonally adjusted annual rate of 4.77 million homes
  • Economists say that 6 million homes per year represent a healthy housing market
  • The sales pace is behind last year’s 4.91 million homes sold — the weakest sales in 13 years
  • Sales have fallen in four of the past five years
  • A record number of homebuyers who signed contracts canceled deals last month, approximately 16%
  • First-time buyers fell to a very low 31% of purchase transactions (they represent 50% in a health market)
  • Declining home prices have kept many people from selling their houses and taking new jobs in growing areas
  •  They have also made people feel less wealthy and that has reduced the consumer spending that drives about 70 percent of economic activity
  • Bigger down payments, tougher lending rules, high debt and a shortage of desirable starter homes are keeping many would-be buyers away
  • Even some with good credit and enough money for a down payment are holding off because they are worried home prices will keep falling

For more:  http://finance.yahoo.com/news/Home-sales-fell-in-June-fewer-apf-154260181.html?x=0&sec=topStories&pos=1&asset=&ccode=





Mortgage Rates Have Moved Lower Over Last Four Months With 30-Year Fixed At 4.58%; Purchase Loan Application Volume Remains At Lowest Levels In 10 Years

2 06 2011

The latest data is showing that the average rate for a 30 year fixed rate mortgage declined 11 basis points to 4.58% since last week while the purchase application volume went flat and the refinance application volume declined 5.7% over the same period. Rates now appear to be trending down having, more of less, declined continually for the last four months.

Purchase application volume remains near the lowest level seen in well over a decade while refinance activity continues to slow.





“First-Time Homebuyers” Should Complete A “Pre-Approval Checklist” Before Looking For Homes

30 01 2011

PRE-APPROVAL CHECKLIST

 

  • The higher your credit score, the lower your down payment and monthly payments.
  • Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment
  • A score of 700 to 720 will get you a good deal and 750 and above will garner the best rates on the market
  • Have your credit report pulled and make sure there is no old, paid or settled debts pulling score down.
  • Stop applying for new credit 6 months to 1-year before you apply for financing.
  • And keep the moratorium in place until after you close on your home
  • Look for homes that are financially AFFORDABLE
  • For FHA financing your home payment shouldn’t exceed 31 percent of gross monthly income
  • If you have increasing annual income that ratio can go higher
  • For conventional financing home expenses should not exceed 28 percent of gross monthly income
  • Increasing annual income will allow ratio to go higher
  • Again, the housing payment (monthly mortgage payment, hazard insurance, property taxes and mortgage insurance) should be comfortably affordable
  • The down payment will be as little as 3.5 percent to 20 percent, depending on your credit scores and expenses
  • Closing costs can run from $2,300 to $4,000, depending on loan program
  • Down payment assistance programs are available depending on where you intend to live
  • The seller can also pay a portion of the closing costs
  • You should have three to five months’ worth of mortgage payments set aside as reserves AFTER CLOSING
  • If you have higher savings, the lender will also allow your housing payment ratio to be higher
  • Also, consider that you will have to pay 2.5% to 3% of your home’s value annually on upkeep, repairs and maintenance
  • On a $250,000 home, the monthly upkeep can be $520 to $625 per month.




The Approval Process For An FHA 203k Renovation Loan Is Very Similar To A Standard FHA Loan With The Added Security Of A HUD-Approved Consultant

29 12 2010

The approval process for an FHA 203k Renovation Loan is very similar to standard FHA loans. HUD requires the prospective homebuyer or homeowner to meet with a HUD-approved consultant, who reviews “required vs. desired” improvements and then prepares a “work write-up”. The consultant is a very valuable part of the transaction as they interface with the contractor and insure that required work is performed.





FundMyRemodel.com Housing Market Update: Homebuyers Should Consider Buying A “Fixer” With An FHA 203k Renovation Loan To Build Value For Long-Term

16 11 2010

Home prices will likely take several years to stabilize, so the importance of building long-term value through a home renovation loan is very important. Read below for reasons why home prices may need several years to stabilize:

  • Plummeting credit scores of the average American consumer. Over twenty five percent of the people in the country have a FICO score under 600 identifying them as poor risks for lenders.  An A+ loan rate from any of the national banks requires a FICO score of at least 720. A FICO score of 620 and under disqualifies buyers from nearly all loan products. As the recession drags on, more and more people will fall into that “poor risk” category. The pool of potential buyers is therefore shrinking despite the historically low interest rates. And while the currently low interest rates are an incentive to purchase for those with good credit, these low rates are not expected to last.
  • Limited financing options available. Even “credit worthy” borrowers today have far fewer choices in terms of the types of loan products available. In the period between 2000 and 2007, many homes were purchased or refinanced with loan products that no longer exist.  Most “creative” products are now gone and it is unlikely that any will be seen again. The fact remains however that potential new borrowers have far fewer financing options.
  • The Shadow Inventory problem.  The problem of the banks Shadow inventory is growing, and growing. The amount of homes sales needed to take these homes off the market in 3 years amount to someone getting a golden ticket in a Wonka Bar. The Banks are just getting drowned with foreclosures. Also, the Horrific time it takes for a short sale home to close just makes this problem drags it out. Again getting back to my original point Time.
  • Strategic defaults. When a borrower has the ability to pay and they walk away from their homes We have seen a rise from last year on People who can pay their Mortgage but are walking away from their homes. At issue here is that these borrowers see people get 4.25% refinanced loans because they are going though trouble and they feel left out. Because they make their payments but can’t refinance because of their negative equity they say the long term benefits of owning their home at the rate they are paying with so much negative Equity doesn’t make sense to them. The Longer problem here is that these people make money and it can take them 3-7 years depending on how they walk about from their debt to buy another home.