Paying to Fix-Up the Fixer-Upper
We all know the MD Suburbs of DC is chock full of homes that are either in a “short sale” or foreclosure situation. A lot of these homes are priced to sell. Of course, they are also discounted due to the cost of repairs that the house will need. You see, the homes that are such a steal because they are either in “short sale” or foreclosure status are being sold in completely “as is” condition. What you see is what you get!
For a lot a of homes the repairs may be minor, for others they could be substantial. Either way, if the Buyer doesn’t have the ready cash to make repairs once they buy the house it may be a deal breaker for them.
A Solution
Luckily, there is a great solution for buyers to be able to buy a home, make the repairs they want to make and keep their cash in their own pocket. It’s called the FHA 203(k) mortgage or, in a lot of cases, the FHA 203(k), Streamlined.
Both these programs will allow buyers to purchase the home and roll the cost of repairs into the mortgage itself.
For example: You’d like to buy a home that’s listed for $300,000 but after visiting the home you find out it needs quite a bit of work. Maybe it’s simple like painting and carpet. Maybe it’s more involved with plumbing work like new bathrooms or a kitchen, electrical work like lighting or re-wiring for a laundry area or drywall work to repair holes in the walls or roofing work…whatever.
Let’s say there is about $15,000 worth of repair work that needs to be done so the house looks really nice and is totally livable. All you do is roll that $15,000 into the FHA 203(k) mortgage and you will essentially finance the costs of turning an ugly fixer-upper into a total beautiful place to call your own.
What’s The Catch?
The beauty of both these programs is that there really is no “catch”. Yes, you still need to qualify for the mortgage through normal means – a verifiable income and such. However, FHA backed mortgages are some of the easiest mortgages to obtain.
Want to know more? Check out the “Common Questions about an FHA-Insured Loan” page. Or if you really want to make sure you qualify for this type of mortgage you can contact Alan Gross of National City Mortgage. He’s an expert in these types of mortgages and can walk you through whatever needs to be done.
October 25th, 2008 at 6:00 pm
[...] I can’t tell you how many times people will tell me “Oh. I’ll live just about anywhere.” or “I want a four bedroom single family home under $200,000.” Sometimes people ask to look only at foreclosures and “short sales” thinking they’re going to get a “deal” only to realize that the kitchen has been stripped bare, the carpet is trashed, there are holes in the wall, there is water in the basement or a host of other issues that you will need to address after they buy the home and move in (see “Paying to Fix Up The Fixer-Upper”). [...]