A Quick Guide to 203K Loans

The "Federal Housing Administration" (FHA) was created in 1934 by the United States government. The agency was created with the three goals of; improving housing conditions and standards, provide a just and proper home financing system through mortgage loans, and to control and stabilize the fluctuating mortgage market. A 203K loan is provided by the FHA, and is also called "fixed" loans, or "rehab" loans. There are two parts of a 203K loan, one part for making home improvements, while another is for buying a new project.

What is considered to be the largest benefit of a 203K loan is that there is only one arrangement for both the home improvement and purchase of a property. There is not as much paperwork or costs associated with a 203K loan as there would be with other loans because as stated above, a 203K loan is a "two in one" loan. The rates associated with 203K loans are quite competitive compared to the rest of the market since the FHA is a government agency, and not a private bank.

FHA 203K loans do not have many disadvantages to them. The only complaint normally ever reported about a 203K loan is that it can take a little bit longer to close on the loan then you would normally expect from someone else like a private lender. In an attempt to minimize the disadvantages, there are a good number of reputable credit broking organizations that will assist you with your money management.

Along with the improvements that will be needed with the house, a 203K loan can help pay for the home itself too. What you get loaned, as far as money goes, depends on where the geographic location of the property you're considering purchasing is. The amount of money loaned is typically 110% of what the home's projected value will be after the purchase and improvement are complete for the home. You can get a loan that is a little bit smaller from the FHA if you are just trying to undertake a smaller task. 203K loans also require an agreement that the improvements on the property must be finished within 6 months of the home loan closing.

It's good to get an estimation of the property and what it's improvements will cost before you buy them, and you get can get a good estimation from a reputable broking company. This is important because you can't go borrow more money from the FHA if you run out. HomePath loans is a spectacular broking company that can help you out tremendously. The amount of services and solutions offered by HomePath loans is very large, the offer things such as debt consolidation, loans, mortgages, and management of finances.