203K is the Way to Get the Home You Want

Posted: June 7, 2012 in 203K, FHA, Gwinnett County Homes, Gwinnett Real Estate, Home Buying, Home Loans In Georgia, Mortgages
Renovation

Renovation (Photo credit: HatM)

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076. Website is www.ChuckWalden.com

Recently, in Georgia, an interesting thing has occurred.  There is a housing shortage.  If you place an offer on a home, there may be 10 or more offers already submitted.   Over the last few months, this has become increasingly frustrating to the buyers I am speaking with on a daily basis. On one hand, it’s great for the housing market because houses are beginning to be sold for more than the listing price.  But on the other, potential home buyers are having difficulties buying homes.

One thing that I have seen separate winning offers from others is potential buyers are making offers on homes that need a little TLC.  These homes are not receiving as many offers if any.  The 203K loan program is a perfect fit for this market.  If you’re not familiar with the 203K, a basic synopsis is below.

1)  There are two types of 203K loans.  The first is called a Streamline K.  This is for any repairs or renovations needed when the dollar amount is $35,000 or below.  The second is a Consultant K.  This would be for any repairs or renovations needed when the cost is greater than $35,000.

2)  You can choose your own contractor as long as he/she is licensed and has liability insurance

3)  This program can be used to bring the house up to standards and to perform any renovations that you would like.  For instance, if you want to redo the kitchen, add new appliances, upgrade a bathroom, etc feel free to do it

4)  This program does require extra work.  The buyer will need to get a bid(s) for the work being performed

5)  The appraiser will take the bid(s) and appraise the home for what it would appraise for after improvements have been made

6)  After closing, the repairs and renovations are completed and you’re all done

7)  Real estate agents do get paid at closing just like a normal transaction

8)  Make sure to use a seasoned 203K company and loan officer.  If you don’t, you’re setting yourself up for failure. Make sure they lend their own money, have their own draw department, and underwrite their own loans.

I would encourage you to explore this program further. It is awesome for the buyer and for the neighborhoods these homes are located in.  If you are a real estate agent if your searching for a new home, call me or email me if you want more information. It is amazing that more people are finally taking advantage of this program in a seller’s market.  I’m here to help walk you through it every step of the way.

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