Need A Loan for Repairs & Renovations-How about a 203k
The 203k loan has been around for a while but it seems to be gaining more exposure. I think this is because more people are researching options in which they can fund a repair and/or rehab work into their homes or those who are wanting to purchase a home that needs repairs and/or updating.
When do you consider getting a 203k loan?
It is a good option for getting the home you love that is just in need of a little (or a lot) of TLC or your existing home that needs a little updating, without using a credit card (which would have a much higher interest rate) or a HELOC (Home Equity Line of Credit), which you may not have enough equity or other qualifications to be accepted for one.
Certain investors will require a minimum $5,000 of improvements made to the house. From there, the FHA loan limits dictate how much you can put into the house. So in essence you can get creative and really do some major improvements. Make sure to ask your lender about your specific situation.
My main point is that there is a loan option out there if you find a home that needs some paint, carpet, furnace, etc. Or if you love your existing home but need to add an addition, a room, pop the top, upgrade your kitchen, bathroom, garage, etc. and don’t have the funds to do it. In essence you become the designer of your home.