Home Buying in 31201>Question Details

Ugaskidawg, Home Owner in 31201

What are the pros and cons of an FHA 203k loan?

Asked by Ugaskidawg, 31201 Mon Feb 6, 2012

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Thank you for the answers. All very beneficial information! This site is great!
0 votes Thank Flag Link Wed Feb 8, 2012
FHA 203K is a great way to purchase a home in need of repairs or improvements. Many REO sellers will not make extensive repairs to a property.

When this is the case, the FHA 203K Renovation mortgage is a great financing option. It allows buyers to purchase and renovate all in one mortgage. Prospect Mortgage is the 2nd largest 203K lender in the country.

With the FHA 203K, there is no minimum or maximum amount for the repairs. We are one of the few mortgage companies to offer both the Streamline and the Consultant versions of the program. Most of the mortgage companies who offer 203K, only have the Sreamline version which is more restrictive. Unlike most companies, we have our own Draw Department which is a critical function.

Dealing with the contractors is the biggest time drain. All work must be performed by a licensed and insured contractor.

To get Pre-Qualified to find out your mortgage options, you can submit a request online at http://www.rodneymason.com. My contact info is also below if you have any questions.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle Renovation | VA | USDA | GA Dream | Jumbo Financing
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Tue Feb 7, 2012
The only con to this loan is dealing with the contractors. If you pick the wrong ones they can take weeks to get you a bid that should take 24-48 hrs.

It is a great loan that you can add the renovations into the mortgage. The main issue with many buyers is just getting the contractors on the ball and moving quickly. Once I have the required info from them I can close in 2 weeks.

If you need more info give me a call or send me and email and I can give you all the info for you certain situation.

Justin Herring
Southeast Mortgage
0 votes Thank Flag Link Mon Feb 6, 2012
There are more pros than cons for a FHA 203k loan. This loan is a rehab loan for FHA ist time home buyers. When there are repairs to be done on the home the lender will lend you the money to repair the home. The minimum is $5k to up to $25k. This amt is added back to the loan & inclueded in your monthly pymt. The work must be done by a contractor & you decide on what work should be done. It enables you to purchase a home that needs repairs and you do not have the funds to fix or a lender would not finance without the repairs. Please call me at 404-455-3783 for more info or email at andrea4homes@gmail.com for additional info or help.
0 votes Thank Flag Link Mon Feb 6, 2012
Some of the good-You can get an FHA loan for a home that normally wouldn't meet FHA MPR's; Some upgrades are allowed, it's not just for repairs; It gives you the choice to personalize your new home to your tastes; The escrow amount is added onto your monthly mortgage payment so you won't have to spend thousands of dollars at once for repairs/improvements.
Some of the bad-not all mortgage lenders will fund a 203k; They take longer to close; Some delays are expected throughout the process.
These are just my personal opinions from an FHA 203k loan I'm working on with a Buyer right now.
0 votes Thank Flag Link Mon Feb 6, 2012
The 203K is a perfect way to purchase a home and cover the cost of improvements . Most REO properties require work and most banks will not lend on a property that needs work. So you are stuck and the 203K solves the problem. The downside is you need to work with a lender and Realtor who are experienced and understand the program due to the red tape involved. Like any FHA loan it does require mortgage insurance.,
0 votes Thank Flag Link Mon Feb 6, 2012
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