As first time homebuyers, you have a lot on your plate. A 203K Rehab loan is a complex product with specific timeframes that have to be met and very tight rules that need to be followed. Managing these details, while overseeing construction and discovering surprises, which accompanies all rehab jobs, won't be the something that just anyone should take on.
I don't know you, so I'm not saying you shouldn't do it, but I want to express that the normal level of stress associated with a major purchase, loan and a move are magnified greatly when you add all of the other elements you are considering.
It might be worth putting the rehab project off until your next purchase. After you've gone through the normal purchase and done some home projects that are more manageable you may find it to be what you are looking for.
I've done electrical, drywall, plumbing, redone baths and finished basements, but I had experience and no outside time or financial constraints other than a wife, kids and a job at the time.
If you decide to move forward with this type of project, don't forget to budget for dinners out, time away from the project and unexpected surprises hiding deep in the walls.
Best of luck however you proceed.
For more details, you can contact me at 503-810-1119. Just a caveat: these rehab loans do not cover every type of repair or remodel, so when the time would come to know what type of rehab and repair you would need, a lender would need to know immediately to know if there are any repairs and/or rehab that is not covered.
Good question and good comments by everyone
Paul W Thompson
- Start shopping around for a good mortgage broker, learn everything you can about the process, and get pre-qualified. Ask every question you can think of and take notes. It's complicated.
- Find a knowledgable realtor who knows the process of short sales, conventional, and everything in between
- ask, ask, ask because they won't offer everything upfront and be very clear where you're getting all your down payment money since that makes a difference to the lender
Just my two cents, for all I know you guys handle stress great. I just want to get in and be done and have found even that proves to be difficult.
I'm glad my answer was helpful. Major renovations can be a headache. Doing some cosmetic things however can be fun and allow you to personalize your home when you get it. Some paint, floor coverings, crown molding, chair rails in the dining rooms are all great projects that are manageable and satisfying.
My question for you is, what will be different next year than today or sooner. I'm not in your market, so I'm not trying to earn your business, but rates are incredibly low and starting to trend up. Prices are also showing signs of rising in many markets. This combination could make the wait a very expensive one if it were possible for you to buy sooner.
No one knows for sure what will happen down the road, but if home ownership is a desire and affordability is a question, consider meeting with a lender and great Realtor sooner to map out a plan rather than later. If things will be better later, you'll have a great plan in place to maximize your outcome.
If you want some names to some great Realtors in the area, let me know. I may have some great options for you, now or later.
get in touch with me, and I'll send you information on the house, the day before it goes public.
if you are planning rennovations with a home to be purchased, the 203k is the best way to finance the improvements, but does not provide funds for do it yourself. Your credit union may have personal line of credit, or your credit cards, but in my opinion, its better to get the bids and amoritize it at 3.5% (current interest rate), over 30 years
As Dan wrote below, you have to have the bids from professional contractors and the timelines must be met (typically 60 -90 days). I could be wrong.. but I dont believe they allow DIY do it yourself, because of the risk of it not getting done, during the specified timeline.
I just wanted to know if it was realistic, in the right situation, to get extra money out of the mortgage to make some minor/moderate updates if we do settle on an old craftsman/portland four square style house.
Thanks again everyone!
I am sure if you called both places they could let you know when the next one takes place.
There are programs available to help....
The FHA 203k program is one of the best I know to do this. Their are many different lending products out there and you best source of advice on that is a lender, may I suggest a good one I have know for 10years to see what products he has available based on your current goals and qualifications. His name is Cody Steinmann at Alpine Mortgage, 360-991-8920.
Always happy to help. If you have any questions or if I can help in your home search just give me a call anytime.
Troy Jensen, Buyers Agent
Professional Realty Services of WA
-James Holcomb 360-281-5611
with a couple of great lenders who can go over the program with you in detail. I'm an old house lover, too, and would live to help you with your purchase if you don't already have an agent.