Posts Tagged ‘home improvement loan’
When you do an FHA 203K Loan as either a purchase or a refinance, and have over 35K in renovations, either structural or not, you have to have a HUD Consultant, approved by FHA to monitor your rehab project, but more importantly, sign off on the initial general contractor bid, before the loan goes into underwriting. The HUD Consultants job, is to make sure the project is in line with HUD “minimum requirements” for FHA to insure your loan.
There is a purchase in Wash Park that I am currently doing a FHA 203K on and the buyer has currently received 3 or 4 bids. He has a $120,000 renovation. It’s the HUD Consultants responsibility to make sure the bids are in lined up with the scope of the renovations, according to minimum FHA requirements. Needless to say, the bids were all over the map with regards to price so it’s the job of the HUD Consultant to make sure the borrower is not getting ripped off, which in this case, he potentially was.
The bid for the electrical renovation was $13,000. The bid for the windows was $4000, both of which were extremely excessive, and the latter, the General Contractor chose expensive Pella brand windows, versus standard windows.
Lucky for us, the FHA Consultant on this job, who also has to be lender approved, was the General Contractor for 15 years building homes for Habitat for Humanity. He acts like “big brother” on these renovations, and will charge around $200 for the initial bid review, and around $100 each time he comes to follow up with the project before each draw request gets funded by the lender.
Think about this for a second. With all the craze in “fixing and flipping” properties, many people try to brave this on their own, and lose big in the process, due to projects going way over bid.
By for the safest renovation loan available is the FHA 203K Loan. This is why:
1. Instead of the usual 6-9 term note for private money renovation lending, you get a low interest rates for a 30 year term with a FHA 203K Loan.
2. You can refinance in 60 days with the initial lender into conventional financing, and if the equity is there, refinance out of the FHA loan, which carries mortage insurance.
3. You have “big brother” HUD consultant watching the entire project, and saving you time and money in the process.
Now you should have a better understanding the FHA Loan and why it’s the safest renovation loan to have. You may also have a better understanding of the role of the HUD Consultant and why he acts as a Big Brother.
Brian Quigley
Contact our FHA Loan Officer in Colorado TODAY to ensure your FHA Loan gets done right.
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Home improvement projects don’t have to be little jobs you finish on the weekend. With home sales still low, many people are starting to improve the houses they live in, and they’re doing it with major upgrades that require fair amounts of money.
Many house improvement projects require some sort of financial loan because they are large scale projects that require payment on materials or labor all at once in order to get the project started. These larger home improvement projects require some sort of bank or lender issued home improvement money. Financing for home improvements are often a affordable way to fix up your house if you have already exhausted all your mortgage options.
Any sort of large scale home remodeling job will almost definitely require some sort of financing for most people. Upgrading a kitchen can easily cost $21,000 or more, an updated bathroom may cost $10,000 or more and a new roof and siding may be as much as $25,000 or more, depending on the size of the home.
There are lots of different options and variables to consider when planning a large house remodeling project and working out a plan to pay for that project should be one of your first objectives. House improvement loans, like most loans, can actually be broken into two general categories:
Unsecured home upgrade project loan: You can get a loan that doesn’t require you to put up anything of value as collateral. These loans are called “unsecured” or “personal” loans and they are often small loans based on your income and credit score. Credit cards can be used as a type of home improvement loans and some credit cards are specially designed just for this purpose.
Secured loan for a home improvement project: A secured loan is based on something of value, so it’s less risky to a lending institution. Often a secured home improvement loan is made using the equity, or extra value, your home may already have. Secured loans are often larger loans that have lower interest rates. A home equity loan or home equity line of credit is essentially a secured loan that is often used for home improvements or remodeling projects.
You can still get a home improvement loan if you have poor credit. Borrowing money to improve the home you own is often seen as a much safer option for many banks than borrowing money to purchase a new home entirely.
Before starting any large home improvement project you should consider your many different home improvement loan options and carefully pick the one that best fits your needs and financial situation.
It’s a house buyer’s market right now, so home sellers are finding that they need to fix up their homes a little bit to really bring in the buyers and offers. The key to raising your home’s value and then sell your house quickly is to set it apart from other homes in the area by giving it more desirable amenities. Try some of these great home improvements get your home sold:
Freshen Up Your Front Yard: A lot of home buyers are looking for properties with a simple “drive by” so a good first impression is crucial! Trim back any overgrown shrubs, make sure your grass is green and cut neatly and think about planting fresh flowers or greenery that’s in season. A little work spent on landscaping can go a long way to get potential buyers in the door.
Modern Bathrooms: The last 20 years have brought a lot of design changes to what buyers expect in a bathroom. Don’t go overboard but new flooring, a new toilet and an updated shower and tub are all highly desirable. Whirlpool tubs and electric towel dryers are almost becoming standard bathroom equipment in many newer homes, so you may want to consider outfitting your bathrooms with the same.
Remodeled Kitchen: Kitchens are challenging because you can very easily spend a lot of money remodeling a kitchen only to to have the kitchen not meet a potential buyer’s tastes. Stick with light colors in the kitchen that will appeal to a larger pool of different potential buyers. Investing in new appliances that stay with the home will always garner more interest and consider spending the extra money on stainless steel appliances which are still very popular.
All of these home improvements will help you sell your home, and most will allow you to increase your selling price once they’re finished. If you can’t afford to do these improvements you may want to think about getting some sort of home improvement financing option, even if you have no home equity. The little bit of money you borrow may quickly pay for itself once you raise your house’s selling price and make a larger profit when it sells!
Want to increase your home value without borrowing additional money? Try checking out a do-it-yourself home improvement website to see if you can learn how to do some of these improvements on your own!
The poor economy has added to the uncertainty most people have to putting out a large amount of cash for a home loan. Improving the house you live in is often much less expensive than trying to find a new one, but there are still some major costs involved with many different larger home improvement projects. Many people are deciding to stay and remodel their existing homes these days, rather than try to sell their houses and move to another home.
Of course many improvements have become much more involved and often entail completely changing a room rather than just putting up a little paint and moving around some furniture. Most big home improvement projects are expensive enough that it’s difficult to save up all the money you need all at once. Here are three things you can do to you can make a home improvement less expensive:
Do Little Bits of the Project At A Time: A lot of home improvement jobs are really a bunch of smaller projects all strung together. When you remodel a kitchen you are really refinishing, replacing cabinets, putting in new fixtures and doing many little additional things. Instead of spending the full amount of cash all at one time, why not upgrade one part of your house each year so that the cost is spread out over multiple years.
Hardware Store Credit Cards: If you are able to buy all your building supplies from a store with a credit card you will probably be able to spread the expenses of the home improvement out over many months, making it seem much less costly. The best hardware store credit cards can often be used to buy supplies as well as services. A lot of home improvement stores such as Ace Hardware and Menard’s offer low interest rate credit cards with no interest or zero payments for a limited amount of time.
Do It Yourself: If you are really handy then you might be able to complete your entire home improvement job without hiring help and you could save hundreds of dollars in labor costs. Not everyone is a handyman, but many people can learn some basic home repair and upgrading skills. Finishing a home repair project by yourself is a good way to build your confidence and save yourself a bunch of cash! Even demolition work can be done on your own if you are careful.
Do not be talked into paying more for a home remodel than you feel comfortable. Most people end up spending many years in the same home, so moving slowly with home improvements can actually save you cash and give you the chance to enjoy watching your home become your dream home! When it comes to upgrading your home, don’t forget that you only have to please yourself.
Money is tight for a lot of people right now, but you can learn how to convince your bank to modify your home loan so that you have extra money available for those home improvements.
There are many different ways to borrow money for a home improvement project, but essentially your options come down to a “secured” or “unsecured” financing vehicle. These two types of loans have advantages and disadvantages.
When you borrow money with an unsecured loan, you are not offering anything up for collateral. An unsecured loan is given based on your past credit rating and your current salary level. You don’t have to have any equity in order to borrow money with an unsecured loan. Most home improvement store credit cards are essentially unsecured loans. Unsecured home improvement loans can usually be used if you have no equity in your home.
Hardware store credit cards are good to use for small house improvement projects that are under $2,000 because the application process is usually fairly short. These credit cards are the most common types of unsecured loans for house improvements. You can sometimes qualify for a zero percent interest rate on some cards for a few months. If you do not want to use a hardware store credit card then you can attempt to borrow cash from an unsecured loan company.
Secure loans are loans in which the bank has some sort of collateral or item which they technically “own” until you pay it off. When you finance a boat or buy a house with a home loan the bank technically owns what you bought until you’ve paid off the debt amount with interest. With a secured house improvement loan your house is the collateral. If you default on your loan then the bank can take your house or car and sell it in an effort to regain some of the money they lent you.
Secured house improvement loans often have more paperwork but they also usually offer a lower interest rate because they are safer for lending institutions to give out due to the collateral involved. You may even be able to deduct the home improvement loan interest amount from your income taxes!
Both secured and unsecured house improvement loans have a purpose and can really help you upgrade your house if you don’t have the cash needed readily available. Be sure to do your homework and make sure you can actually repay the loan on time.
Need to learn more about how you can pay for that home remodeling project? You might Need to also read about refinancing a home loan to decide if now is the absolute best time for you to take money out of your home.
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