Financing in Philadelphia>Question Details

audreykw1, Home Buyer in Philadelphia, PA

203k Loan Question (New home buyers with limited credit, also wondering about foreclosures)

Asked by audreykw1, Philadelphia, PA Thu Mar 28, 2013

My husband and I are planning on buying a home in the next year. We have limited credit because we just started building credit recently (recent grads who have some school loans, and one credit card). A couple questions: How long will we need to build credit to have satisfactory history for a good loan rate? Also, we are very interested in the 203k loan. Who in the West Chester, PA area is a good 203k lender? Do people often use 203k loans with foreclosures?/Does that work well? Or is that more complicated?

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Answers

6
jameswwheelock’s answer
Really as long as you have three different trade lines you could likely be ready with just 1 year worth of timely payments on three different loans.

The best 203k loan specialist in your area is going to be found at the link below. He is one of the best renovation specialists in the country.

https://www.wfhm.com/loans/jeffrey-philibin/about.page

People use the 203k loan on foreclosures all the time. It can be a little more difficult to get your offer accepted on a 203k loan and it can at times be a little difficult to get a loan closed as fast as most of the asset managers handling the sale of foreclosures want things to be done in.
0 votes Thank Flag Link Sat Apr 6, 2013
Excellent questions. I love the FHA 203k product. It allows you to purchase a home, finance the renovations, and so build instant equity.

We purchased our current home 6 years ago with a 203k. It allowed my family to buy the size home we needed in a neighborhood that we otherwise could not have afforded. Since then, I have worked on 203k's as an appraiser and developed my companies 203k program as the Collateral Valuation Director. The 203k is my favorite loan to do.

The 203k is excellent for purchasing a foreclosure. Often a renovation loan is the only way to finance them because the repairs needed make them inelligible for typical financing. A 203k is a bit more complicated than a normal purchase loan but not overly burdensome. Your lender and 203k consultant should be experts and walk you through every step of the process.

1. Get pre-approved
2. Find your house and make an offer. Take into account its current condition in your offer price. Your lender should be able to educate your realtor about the process if they are not already familiar
3. Your lender will help you select a HUD 203k consultant. You will talk with them, and meet at the property with you 203k consultant, lenders rep, and hopefully a contractor you have chosen.
4. The 203k consultant will write their scope of work report based on your chosen list and HUD required repairs.
5. The appraisal is done based on the value of the property AFTER the repairs are complete. It is critical that your lender works with appraisers who are experts on 203k assignments.
6. The loan amount is finalized. It can be 110% of the after improved value of your home as reported by the appraiser.
7. Your lender approves your loan
8. Closing and initial disbursement of funds to your contractor
9. The renovation is completed over no more than 6 months. Your lender will continue to work with you to disburse funds to your contractor.


Sorry for the long post. Regarding your credit, you will need a 640 credit score to qualify. Each situation is different, a lender can help you get your credit where it needs to be.

Check out this video of a 203k renovation and addition cut down to 30 seconds-

http://vimeo.com/user10621420/review/61764408/9671e9238d

Wes Costello
AnnieMac Home Mortgage
610-659-7014
1 vote Thank Flag Link Fri Mar 29, 2013
Audrey, please send me a separate email and I will respond to your latest question. Thankis.

wcostello@annie-mac.com
Flag Mon Apr 1, 2013
Thanks for all the details! What are the interest rates currently like for these loans?
Flag Sat Mar 30, 2013
HappyMemorial Day weekend, 203k, What, When, Why. This is the latest in the helpful products to helpbanswer problems of loans requirements in the past.
Audrey, the most important part to a 203k loan IS THE LOAN AND WHO DOES IT. SERIOUSLY! !!!
Please check out my blog post specifically devoted to this 203k topic. http://www.dirktherealtor.com Currently there are NOT many mortgage compsnies and brokers thay SUCCESFULLY CLOSE (key word CLOSE) these loans. Again http://www.dirktherealtor.com. plesse take a look at it. It is a lengthy post but because of the topic, clarification to the process is needed. I currently have a 203k loan closing June7th. I dont want to say the bank bevause thete have veen some issues (appraisal, communication, timely, etc). I am of course "hawking" my blog but I really suggest you take a read. http://www.dirktherealtor.com. Any other questions feel free to contact me. Happy hunting!! 

Also I almost forgot thete are se other options that may be better. Like a Homepath Home purchase or try looking at the website: http://www.naca.com.
Yes I am a bundle of info. Lol.
Again ferl free to contact me with any questions.
*Typed with thumbs** 

Dirk Parker Prudential Fox & Roach Jenkintown 
http://www.dirktherealtor.com (blog) 
http://www.dirk.parker.prufoxroach.com (web) 
215-908-9390 (cell) 
"Helping people realize their Real Estate goals everyday"
0 votes Thank Flag Link Sun May 26, 2013
From my experience with 203k loans, the best advice is to use a lender that offers assistance via third party with 203k processing.
This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.
0 votes Thank Flag Link Sat May 25, 2013
You have received two good post. The best advice as a REALTOR I can give what I do except for who your loan is being done by. What I mean by that is the company can be good but if the Broker is not good doing 203K Loans you willnever close on time and have problems while doing the construction end. If it is worth anything start by calling Wes Costello now and get started I've never been able to sit down Wes but I can tell you that his information is right on point and any Mortgage Broker that puts that much time and info in a post is a must contact for you. If I can be of any help please call me 215-725-5700 X49

Philip J. Cunningham Sr
V.I.P. Realty Corporation
7942 Bustleton Ave
Philadelphia,PA 19152
215-725-5700X49
philcunningham2004@yahoo.com
Web Reference: http://www.GreatPaRE.com
0 votes Thank Flag Link Fri Mar 29, 2013
203K can be used for foreclosures since the property is being sold AS-IS and the work needed to the property is being financed by the mortgage company under the 203K loan. It is not a simple process, but if it fits you it can really build some equity in the home by doing the needed renovations. I would suggest getting in touch with a lender that deals with 203K on a regular basis. I deal with a company that knows them well. You should work on your credit and familiarize yourself with the process of the 203K. Feel free to contact me for the 203K mortgage officer's info. My email is peteramc@hotmail.com.
0 votes Thank Flag Link Fri Mar 29, 2013
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