Update your home with generous refinancing terms
With refinancing insured by the FHA, you can get generous terms on your refinancing and use those terms to transform the equity and quality of your home.
Build new equity.
Even if you’re already in the home, a Renovation 203(k) loan refinance can help you build new equity in the home while you live in it.
Lowering your mortgage rate (potentially).
When you refinance with a Renovation 203(k) loan, you can potentially lower your mortgage payment every month while securing a better value and quality of home—all without having to move.
Generous qualification terms.
Qualifying for a 203(k) refinance is easier than you might think, including generous qualification terms that make it easy to access these funds.
What You Need to Know about Refinancing with a 203(k) Loan
- Expect a low downpayment. FHA loans can come with downpayments as low as 3.5%, which broadens its access and helps ensure that people can find more generous mortgage terms even while still living in their home.
- There are plenty of FHA-approved lenders. If you’re looking to refinance your home for purposes of renovation as well as finding more generous terms, it pays to shop around. That good news is that you can work through plenty of FHA-approved lenders to find the best possible rate.
- An FHA refinance loan can help you build equity in a tough market. In a seller’s market, finding value in homes can be difficult. A 203(k) refinance can help you build equity in what you already have.
- It can cost as much as 9-10% of the home’s value just to sell it, according to The Mortgage Reports. That means that it’s often more convenient and even more financially viable to use a 203(k) loan to refinance your mortgage, ensure a lower monthly payment, and improve the quality of your home—all without having to take the costs associated with selling.
Do you want to live in a better-quality home with potentially more generous mortgage terms?
What Do You Need to Know about Refinancing with a 203(k) loan?
Q: What is a 203(k) loan?An FHA 203(k) loan is a specific type of loan used to update the quality of your home. Some people use this loan for refinancing purposes while also getting the money they need to renovate and update their home.
Q: What are the terms of a 203(k) loan?The terms of a 203(k) loan can be quite similar to any mortgage. Because they’re FHA-insured, however, there are generous terms available in some cases, such as low downpayment (as low as 3.5%) and low credit requirements. But like any loan, having higher credit and downpayment available will be beneficial for the borrower.
Q: Can I treat this like refinancing my home?Refinancing your home with an FHA-insured 203(k) loan allows you to roll the costs of home improvement projects into a simple, regular mortgage payment. This can give you more flexible terms than taking out a private loan, for example, or funding these renovations with a credit card, which often features much higher interest rates.
Q: What’s different than a 203(k) loan used upon home purchase?The main issue here is timing. You can use a 203(k) loan upon the purchase of a home to renovate it up to your standards, provided that the renovations you want to do fall within the requirements of the loan. However, these loans typically cover all sorts of typical home renovation projects including removing safety hazards and improving the home’s cosmetic appearance.
Q: What is a limited 203(k) renovation loan?When you don’t need as much money to update the home, you can use a limited loan—in a smaller amount of total dollars—to secure the renovation. This is usually done up to $35,000, without a minimum cost requirement. If your home doesn’t need as much work, a limited loan will be best for you.
Refinance with a 203(k) Loan Today
What if you already live in your home, but you want to build equity?
Then the 203(k) loan is an ideal vehicle for you to build the value of your home.
Refinancing in this way can help you secure low monthly payments for the improvements. It can also help you generate more value in your home in a difficult market, when finding “bargain” homes is much more difficult.
Speak with a (203K) Refinance Specialist today
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