What Are The 203k Rehab Loans Seattle Lenders Talk About
by Stephen Johnson
If you love old houses and are in the market for one for yourself, you have to take the cost of renovating it into consideration. If you're unfamiliar with 203k <a href="www.privatecapitalnw.com/fix-and-flip-rehab-loans/">rehab loans Seattle</a> lenders can offer, you probably think you'll need two loans, one to buy the house and one to fix it up, or save up for repairs as you go. Hopefully your lender suggested a 203k option. With this loan, you get the money to buy the house and renovate it all wrapped up in one.
There are two kinds of 203ks. The standard is used for major structural repairs. You won't be able to live in the house while the contractors are working on it with this loan. There is much more paperwork involved with the standard as compared to the other type of 203k, the streamline.
A streamline loan is for less drastic renovations that are mainly cosmetic. You can get up to thirty-five thousand dollars. Before remodeling can start, an appraiser must inspect the property and list the required and requested repairs, that are on FHA's approved list. A contractor bids on the job, and the lender either accepts or rejects the proposed repairs.
You don't get the money for the repairs. Half on the approved amount goes to the contractor, and the other half is put into escrow. Once the work is completed, the contractor receives the remainder in escrow, and the escrow account is closed out. The buyer has one mortgage payment that covers the purchase and the repairs.
There is a list of repairs that FHA will allow with a streamline 203k. Improvements to accessibility, electrical and plumbing systems, repairs or replacement of roof, gutters, downspouts, exterior siding, and windows and doors are allowable. Installing a brand new HVAC system is not on the list, but repairing an existing one is.
Removal of asbestos is allowed, as is stabilization of lead based paint. If you are outside the city limits, and have a septic tank, the loan will pay for any necessary repairs to it. You can remodel the bathrooms and kitchen. You may buy new appliances and have them installed. You can finish or remodel a basement, but you may only do cosmetic renovations.
You have to be sure to reserve enough money in the 203k loan to cover the additional expenses that will be applied to it. Ensuring the contractor is adhering to FHA standards will require two inspections. There is a title update fee that is protection for the lender in the event the contractor files a lien against the house.
There is a contingency reserve of ten to twenty percent. This is money set aside in the event there are cost overruns. A supplemental origination fee is charged for the extra work of setting up and maintaining the escrow account. If you can complete your project within these parameters, a 203k loan can be a perfect solution for you as the homeowner.
You can find an overview of the benefits and advantages of taking out <a href="http://www.privatecapitalnw.com/fix-and-flip-rehab-loans">rehab loans Seattle</a> companies offer at http://www.privatecapitalnw.com/fix-and-flip-rehab-loans right now.
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New Unique Article!
Title: What Are The 203k Rehab Loans Seattle Lenders Talk About
Author: Stephen Johnson
Email: nathanwebster335@live.com
Keywords: Rehab Loans Seattle
Word Count: 501
Category: Finance
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