Financing in 60637>Question Details

2thepoint, Home Buyer in Chicago, IL

Possible Refinance

Asked by 2thepoint, Chicago, IL Wed Jun 5, 2013

I'm currently having work completed for a collapsed sewer. Everything obviously is not covered by my insurance (only sewer back-up etc). To complete repair and replace damage, I am running short on funds. I have other items I would like to update in my home. Would a refinance with Streamline 203K be a good option to complete the work I in as well as upgrade?

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You can look at a full 203k as an option- or you may also want to consider a conventional rehab loan if you can qualify. A conventional loan will have less fees and a lowery monthly payment.
Sam Sharp
Senior VP if Mortgage Lending
Guaranteed Rate
773-290-0455
1 vote Thank Flag Link Wed Jun 5, 2013
You should call Sam Sharp , he get the things done
0 votes Thank Flag Link Fri Jun 14, 2013
Call Sam Sharp! He is an outstanding and gets loans done.
0 votes Thank Flag Link Fri Jun 14, 2013
2thepoint,

I had to tear out my sewer line a year and a half ago due to aging clay piping and couplings, it was a pricey project. Digging a 6-7 foot deep hole in the ground forty feet long is anything but cosmetic...

Since you'll need a Full 203k loan, you'll want to have your general contractor (or multiple contractors, one of which must be a GC but a single GC would keep things more orginized for the lender and yourself) get out to the property and bid out the remainder of the work to be done and have your HUD consultant meet with you both at the same time to get the ball rolling on that aspect. Since the sewer line is pretty essential to a home's ability to function, my guess is you'll find a way to pay for it before you can wait the ~45 days to close and start work so the remainder may only be cosmetic work inside the home but if you're not in a position, you'll definitely need to proceed with the above.

If you need a referral for a HUD consultant, shoot me an email, I'll be happy to help with that.

If you have superior credit or more than 5% equity (10%+ ideally), the conventional version would probably be the best route to go, contrary to a post below, the conventional version (Fannie Mae and Freddie Mac are both investors for a conventional rehab loan) CAN be used for both structual and non-structual repairs and more than 30k as well, just like a full 203k.

Another correction, the 203K will allow up to 110% of the after improved value to DETERMINE your max loan amount on a refinance or purchase but you will _NOT_ be getting a loan for 110LTV (LTV = Loan-To-Value AKA 110% of the value of your home). All FHA loans have a base loan amount and the up front mortgage insurance premium (UFMIP) is financed on top of that (unless you want to pay to reduce your loan amount). For your example the max LTV will be 110% of say a 100k future value which is 110k minus your required investment of equity (or cash if you don't have sufficient equity to cover all of the work+financed costs). FHA requires as of when I write this a 2.25% equity position on a refinance (3.5% on a purchase) so your max LTV would be 110% x 97.75% = 107,525 + the financed PMI for the FHA loan.

I'll stop here for now, feel free to ask more questions here or email me directly if you need accurate answers to your questions immediately.
Web Reference: http://RobWeber.com
0 votes Thank Flag Link Sat Jun 8, 2013
A streamline FHA 203k would work as long as none of the repairs are structural in nature. Otherwise you'll need to go with the full FHA 203k loan. In either case, how much you can get will come down to value of the home. Our office originates both of these and we have a lot of experience with them. Call me for more details. You can also check out my website http://www.203kloanschicago.com.

Bradley Eggers
One Mortgage, Inc
c) 847-744-0168
o) 847-963-1000
NMLS #: 222407
0 votes Thank Flag Link Wed Jun 5, 2013
This type of project would not qualify for a streamline 203k, but a full 203k would work for this type of work it will allow up to 110% loan to value. In regards to a conventional renovation loan, those are a little trickier, as you can really only do cosmetic renovations that add value up to 95% so depending on how much equity you already have and what other types of updates you would like to do it may be an option if you qualify. If you would like to discuss please let me know, I have been doing both the 203k loan and conventional renovation loan for many years.


Regards,
Jim Pontious
Mortgage Banker
PHH Home Loans
773-704-7299
0 votes Thank Flag Link Wed Jun 5, 2013
2thepoint,

I send all my clients to the folks at Guaranteed Rate. If it can be done talk to Sam.
0 votes Thank Flag Link Wed Jun 5, 2013
If.gov have equity in your home have you considered a home equity loan or line? Less red tape there when compared to any sort of rehab loan.
0 votes Thank Flag Link Wed Jun 5, 2013
Sorry to hear about this.

I would speak to a lender and see what different options they offer you. They will be able to go through your finances and tell you what looks best.
0 votes Thank Flag Link Wed Jun 5, 2013
I am sorry for the collapsed sewer , Sam has a good point , I hope you can complete the repairs in the next future
0 votes Thank Flag Link Wed Jun 5, 2013
no, streamline 203k will not allow this repair. will need a full 203k
0 votes Thank Flag Link Wed Jun 5, 2013
Is that because of any possible outside work? Also are you required to have a project manager with a full 203K?
Flag Wed Jun 5, 2013
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