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Brent Kluge-203k Lender-expert-16years-baltimore-maryland's Blog

By Brent Kluge | Mortgage Broker
or Lender in Rockville, MD
  • FHA 203K - Refinance and Fix up your existings Home

    Posted Under: Financing in Rockville, Remodel & Renovate in Rockville, Design & Decor in Rockville  |  May 21, 2011 3:20 AM  |  1,569 views  |  2 comments

    FHA 203K Refinance - How does it work?

    1st - You must pay off your existing debt in the new mortgage.  This means ALL debt that is secured with a lien on the house. In addition, no other liens or encumbrances can exist on the deed. (mechanics liens, back taxes, judgements).  They all must be included in the new loan.

    2nd - ALL  the Fees can be wrapped into the loan.  Yes, you will have to pay for some incidentals up front - About $1,000.00 or so, depending on the size of your renovation, but you can get these funds back at settlement.

    3rd - Your new mortgage is based on your "improved value", so if you $200,000.00 on your mortgage currently, and it is worth about $250,000.00, not much room in equity.  BUT...  if after putting a 3 room addition on, costing $100,000.00 -  This house will now appriase for $375,000.00, you are in good shape.  We are only looking for the final number to cover your total loan amount. ;)

    Lost Count , NEXT - You have the option to even escrow mortgage payments into your loan, in case you can not live in the house during construction and have to live elsewhere.

    Then - When you settle, the construction funds are held in escrow and your contractor will submit for draws through your appointed 203k Consultant. 

    Finally - When all the work is done, you have an FHA mortgage.  Do nothing and you are fine.  Have 20% equity now and REFINANCE to a conventional loan to drop the Mortgage Insurance.  (this typically can not happen until 6 months after the closing).

    Easy - Breezy! 

    Fha 203k - Versitile Residential Renovation Loan 

    Save yourself time, energy, frustration and money ... 

    Work with Experience.

    Kluge Out.

    Brent Kluge

    Cell: 410-591-8300

    Fax: 888-557-5271



  • FHA 203k Process - How do I get started? Maryland/Baltimore

    Posted Under: Financing in Rockville  |  April 22, 2011 4:17 AM  |  1,336 views  |  No comments

    Federal Housing Administration (FHA) 203K process can be confusing. The reason 99% of mortgage Brent Kluge 203K Lenderlenders don't do them is because they have a LOT of moving parts... Contractors, appraiser conditions, specialty inspectors, underwriters, loan officers, county code, construction principles, engineers, architects, and sometimes Uncle Bob, who has "been in construction all his life." Wheeww! There are a lot of chefs making that soup!

    By and large, all the steps in an FHA 203K projects proceed in a similar order. Remember, this doesn't apply to every case. Sometimes property- or contract-specific issues crop up require a different action or order. But the majority of cases proceed like this…

    FHA 203K Typical Process Flow:

    1. Professional Selections – Choose your lender and realtor.Brent Kluge 203k Lender
      1. Lender: DOCUMENT your lending company's and loan officer's experience.
        1. Everyone claims he's an “expert” and with plenty of experience… Make him PROVE IT!
  • Realtor: National Association of Realtors has a Short Sales and Foreclosure Resource Certification (SFR). Make sure your agent has one if you are buying a short sale or foreclosed house.
  • Pre-Qualify
      1. Talk to your lender to figure out an AFFORDABLE price range for your home. (Remember, just because the bank will give you a huge loan doesn't mean you can afford it.) Then, start shopping.
  • Property – Choose what fits for YOUR needs.
    1. BEFORE making an offer, review the numbers with your lender.
    2. Have realtor do a CMA (Comparative Market Analysis, sort of a “mini-appraisal”) to get a snapshot of value of home when fixed up.
  • Offer
    1. SPEAK with your lender first
        1. Make sure you include all disclosures necessary for the renovation loan.
        2. All sufficient time for all due-diligence inspections.
        3. Watch out for FHA Financing Addendum. Make sure you:
            1. STRIKE the “Amendatory Clause” completely from contract and,
            2. Put "FINAL VALUE" in "Appraisal" field.
  • Verbal Acceptance
      1. brent kluge 203k lenderAssemble inspection team
      2. You have a contractually limited amount of time to perform inspections.
      3. Schedule them as SOON as possible.
      1. Select title company
          1. Get a "Preliminary HUD1" from your lender (he'll know what that means).
  • Acceptance
      1. Perform Due Diligence inspections
      2. Be sure to include specialty inspectors, including:
        1. Termite
        2. Radon
        3. Well/Septic
        4. Structural
        5. Mold
  • Contractor/Project Reviews

    Remember, this flow chart represents only PHASE 1 – Planning, Offer, and Inspection (POI). You still have settlement and renovation ahead…


    Also remember, this flow chart reflects the typical order for an FHA 203K. Many times, items will pop up specific to the project or property that require other actions, inspections, or specialists. THIS IS WHEN THE EXPERIENCE OF YOUR LENDING TEAM IS CRITICAL. They need to be knowledgeable and flexible to deal the exceptions and hiccups that no one is expecting.


    Being PROACTIVE in this process – setting a strategy – is of the utmost importance… being able to adapt to contingencies is vital. If the process seems overwhelming… NO PROBLEM. Brent Kluge will assign you a “Project Coach” who will be at your disposal throughout your entire project. Your Project Coach will lead you through the process and helping you make the best decisions for you.


    Go out, buy houses, make equity, enjoy life…


    Kluge Out!

    Brent Kluge

    Phone:  410.591.8300

    Email:  info@203kworld.com


  • VIDEO BLOG: FHA 203K - Selecting Your Contractor

    Posted Under: Home Buying in Rockville, Financing in Rockville, Foreclosure in Rockville  |  January 30, 2011 9:30 AM  |  831 views  |  No comments
    Please click the link below to see my Video Blog. 

    If you like it and find it helpful, please click "Like" and "Subscribe" on my Youtube channel, 203kworld!!!


    Ask any questions and as always...

    Many thanks!


    Brent Kluge
    C:  410.591.8300
    E:  info@203kworld.com

  • 203K - The 203k INQUISITION!! Ask thy lender questions!

    Posted Under: Home Buying in Rockville, Financing in Rockville, Foreclosure in Rockville  |  August 3, 2010 3:55 PM  |  853 views  |  1 comment

    So 203K's are all the buzz!!!  Great!  We knew this was going to happen.  Dinged and dented inventory is UP...  Interest Rates and qualification requirements are DOWN!

    But why is it that only a fraction of these loans actually make it to the settlement table?

    Well the answer is simple...  You were working with the wrong professional. 

    Lets be clear, in today's information world, it doesn't take much to put up a website and claim that you are a this or a that. It is not hard to promote oneself as being an "industry leader" in something.  I mean the truth is, there are SO many people out there blogging and giving information and opinions, I'm sure many of these "industry leaders" are taking their muses from other folk and passing it off as their own. Why not, happens all the time.

    So how do you KNOW someone can get your 203K or other renovation loan closed and ACTUALLY has experience?  

    DING DING DING... Story time!

    I happen to know of a lender that has an amazing website. This particular lender touts itself as a leader in 203K renovation loans. They even boast on their website items that say "Years of Experience" and "Direct Underwriting" and fun catch phrases like that.   I did some mystery shopping the other day and just called as an unknowing consumer and asked about the, "F H of A loan that lets me fix a place!"   Well, I said I had heard about how many lenders are trying to figure them out and really have no experience and the horror stories that come from finding out months down the road that there is NO progress and the continued asking for things until finally, the loan is rejected!  They said, "Well of course, Sir, that would NEVER happen here."


    So, I started a few questions:

    1.  "Well, can I first start with a few questions?  What is your NMLS ID number?"

    This puts them on notice.  Like asking a telemarketer for their operator number before you will continue.

    2.  "Will you be working on my loan directly or referring me to a department?"

    This is important information to know!  Don't you want to talk to the Loan "Officer" you would be working with directly?

    3.  "How many 203K loans have your personally settled?"

    This is a very direct question.  You want to know if this person has experience in settling 203K's.  Be direct. how many have you SETTLED? 

    4.  "What HUD 203K Consultants do you work with?  Will you provide me with a list?"

    This will let them know at this point, you mean business.  If they stammer or stutter or say they are not sure, there may be a cause for concern at this point.

    5.  "Would you be inclined to send me a vitae/resume, and put your personal 203K experience in writing, including the total and recent number of 203K loans settled?"

    This is the final straw. If they are doing HUD loans and are serious about your business, they will jump through this hoop.  BE WARNED... they will not be used to this. They typically have not been asked for this.  IF you are going to have a medical procedure done, don't you want to make sure you are not working with someone who only had a webinar training?  If you are going to go tandem skydiving for the first time in your life, don't you want to know this isn't the jumpmaster's first Geronimo!

     This is not different.  The truth is folks (buyers & agents alike), if this lender is worth their salt, as far as 203K's go, they will COMPLETELY understand why you are asking for this information and gladly provide it.  I OFFER it to every customer and actually include it along with my prequal letter to the agents and asset managers to make them feel comfortable with my experience.


    Enjoy life, have fun... Renovate Real Estate!

    Kluge Out!

    Brent Kluge

    C:  410.591.8300

    E:  info@203kworld.com

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