Which Type of Home Loan is Right For You?

Buyers who wish to purchase a home in need of renovation or repairs may not know the cost associated with completing those repairs and will likely need assistance. Being pre-qualified for a home loan is favorable and a mortgage broker can assist borrowers with this process. Because so many different types of home loans exist it is very important to understand each loan type.

Buyers who intend to purchase a home requiring repair or renovation should consider a 203k loan. Buyers may be asking, "what is a 203k loan?"
The costs of repairs can be merged with the cost of purchasing the home into one loan with a 203k FHA loan. 203k loans appeal to many because of the extensive list of repairs that can be done and will qualify. Repairs can be made to chimneys, flooring, landscaping or a complete total house renovation can be done using the funds from a 203k loan.

An appraisal of the property must first be completed so that the lending agency is aware of the base value of the home before any repairs. Bids and estimates submitted by qualified contractors will be used to determine the after renovation appraised value of the home. Time constraints exist on the timing of the repairs which contractors need to be aware of. Homes can receive a new life with a 203k loan and home buyers and home owners alike should consider this as a financing option.

Brokers will often cover explanations of 203k loans and homepath loans together as they have similarities. Because the cost of repairs can be wrapped into a homepath loan as well, the two types of loans are often compared directly.Repossessed or foreclosed homes qualify for homepath loans. Houses which qualify for homepath loans are all sold in as-is condition and should receive a thorough inspection from a potential buyer. Repair costs are bundled with the mortgage resulting in a mortgage that will initially exceed the value of the property. The details of each loan type can be confusing to many which is why it is important to consult with an educated mortgage broker.

Documents needed to secure a home loan must be received on time and be complete in order to secure a loan. Brokers will also be certain that customers understand the amount of down payment required for all types of home loans and any costs associated with appraisals.
Once you have found a home within your budget it is exciting to know that you can morph that house into your dream home.