Most people think of home rehabilitation loans are not useful to them and prefer to use a home equity loan instead. As home prices rise many home owners to get loans for home improvement equity, because they had enough equity in their homes. Home equity loans have become the choice as a decline in house prices in recent years. In times of economic crisis, FHA 203k could actually be very useful for homeowners who want to improve their homes but do not have extra money and can not get a home equity loan because it could no longer meet the requirements requested.
There are several ways to use FHA 203k loan.
First, you can buy property as a dwelling and using the FHA 203k loan to repair and rehabilitate the purchased property.
Second, you can get a FHA 203k loan for the dwelling you want to buy, then mortgaged the 203k property to new foundation that will provide loans to help rehabilitate the property at the new location.
Third, FHA 203k loans can also be used to refinance mortgages as well as providing cash to improve housing. In other words, this is a way out for you to be able to buy a "fixer-upper's."
FHA 203k users will get a different loan amount, depending on the rehabilitation that is being done.
Property value after rehabilitation that will be a reference to the total loan that you get. The portion of repairs and rehabilitation may not exceed $ 35,000. An appraiser will come to assess this and determine the amount of loans that may be taken.
What are benefits for home buyer? They can buy a good property and have enough funds to fix it.
And what is benefit for home seller? They do not need to spend money from their own wallets to repair the house. I think it is a good home loan program and very beneficial for both parties.