Financing in 07088>Question Details

Jane Doe, Home Buyer in 07088

Mortgage points for an FHA 203K loan?

Asked by Jane Doe, 07088 Fri Apr 3, 2009

I am looking to get an FHA 203K mortgage. My lender advised me due to the type of mortgage I would have points added. Is this true? If so are there any alternatives to obtain money to fix up a house without coming out of pocket

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You do not have to pay points for a 203k loan. It's a really good program. If you would like more details, contact me and I will be happy to discuss it. I'm a mortgage loan officer who specializes in FHA. BTW Countrywide suspended its 203k program last fall and Wells still does them but sends the loans out of state for processing and it takes forever.
Ruth Bonapace
ruthbonapace@gmail.com
1 vote Thank Flag Link Sun Apr 5, 2009
Dear Jane, Damon is mistaken as to the reason why it is necessary for you to pay points to obtain a 203K mortgage with ANY lender.
A 203 K mortgage is usually a short term LOAN, because it involves added risk for both the bank and the buyer. If done right the buyer will gain immediate equity in the property of 15 to 20% by the time the work is completed.
This being the case, these loans are refinanced within the first 12 to 24 months after being obtained. This short period of time doesn't allow the bank to recoup expenses (securitization and commissions paid) associated with the loan, so to make the loan more profitable they pass on costs to the borrower.

To defer these costs, I suggest you request a sellers concession, up to the maximum 6% of the purchase price to help pay for closing, thus limiting the money coming out of pocket and instead financing it.
1 vote Thank Flag Link Fri Apr 3, 2009
http://www.nj-hmfa.com-has the program you need. Depending on your income you can obtain 20k-also if you are making the home energy efficient there is a 16k with very low rate by the state of nj...let me know how it work!
Nicaury Miller
nicaury@nicaury.com
908.337.2824
Web Reference: http://www.nicaury.com
0 votes Thank Flag Link Tue Jul 28, 2009
It all depends on the lender that will be underwriting the loan. Some mortgage brokers charge points on the 203k loan because it is a lot more work involved instead of a regular FHA loan. I would find a lender like Countrywide or Wells Fargo because they do the actual 203k loan inhouse and you can choose to pay points or not.
The 203k program is the best on the market to purchase and renovate an owner-occupied property. In this current financial crisis it is going to be hard to find any real competition.

Good luck!

Damon Redmond
862-371-9951
0 votes Thank Flag Link Fri Apr 3, 2009
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