The FHA Rehab Loans Process Timeline

Have you ever thought about the process for an FHA 203k loan? Before searching for a house, it is always wise to complete a full preapproval with the mortgage broker. After you have a completely signed purchase contract and have done the house inspection (if applicable), you’ll have to contact your loan expert to complete the FHA 203k loan application.

In this post, we’ll be covering the steps that’ll show you the general timetable and workflow for the FHA 203k mortgage that include:

  • Contractor’s estimate
  • Mortgage application
  • Appraisal
  • 203k paperwork
  • Underwriting
  • Closing

Contractor’s Estimate Is One Of The FHA 203k Loan Requirements:

Get a contractor’s estimation that breaks down the fixes which are listed on the town point of sale statement and any upgrading items that you desire appended to the loan. The contractor will require to give proof that he’s registered with the town that the home is located in, bonded or licensed, and holds the good licenses (if needed). The contractors’ licenses required might include any of the following: roofing, electrical, plumbing, and/or HVAC. The estimate ought to be itemized and broken down between materials and labor.

Mortgage Application For 203k Streamline Loan:

Contact the loan professional to complete the formal mortgage application. The documents required should include but isn’t limited to the following: two months’ bank statements, thirty days’ pay stubs, a copy of your social security card and driver’s license, and last two years’ tax returns and W2s. The following might also be required: separation and divorce agreement, bankruptcy papers, and corporate tax returns (if you’re freelancing). A house owner’s insurance quote ought to be obtained at this point.

Appraisal Is Required By The FHA 203k Loan Lenders:

The FHA 203k evaluator might locate additional repairs to be appended to the contractor’s estimate. If this occurs, you’ll have to give an updated estimate before the appraisal being done. A lot of brokers might also need a lead base paint examination.

 

203k Paperwork To Get Rehab Home Loans:

Once the assessment is received, the consumer(s) and the contractor will have to complete the 203k paperwork before the loan is submitted to underwriting.texas 203k loan 

Underwriting:

The mortgage file is submitted to a backer to make the last determination on loan. Typically, FHA 203k mortgages will have approval states that’ll have to be satisfied before moving the loan to the closing division.

Closing The Deal:

A form called the closing disclosure has to be obtained by the buyer at least three days before signing the closing documents. Once the closing papers have been signed by both the seller(s) and buyer(s) and the loan is funded and filed with the local court, the first payment from the 203k account is typically drawn within two to four weeks. The final payment from the 203k account more often than not will not happen until all the improvements and repairs are done. The buyer(s) will also need to send written documents to the broker that they acknowledge the fixes are done to their contentment and the home passes a final re-inspected by the evaluator.

FHA 203k loans are subject to loan limitations according to the county and state where they are located. Also, the 203k streamline loan just permits up to 35,000 dollars to be appended to the loan for improvements and repairs. If the mortgage fixes exceed 35,000 dollars or the contractor’s estimation includes structural fixes, the loan would be deemed a full 203k mortgage, and an FHA consultant would be fixed. On this mortgage type, borrowers ought to stay in touch with their loan professional to give any extra information required and ensure the loan is processed in a timely manner.

The contractor has up to six months to finish the necessary fixes. They’ll be paid in as the job is completed and inspected. A 203K loan has a provision where you might stay in your current house with no loan payments due if the new home is not livable. It permits the contractor to complete the essential work without a strain on your financial plan. An FHA 203k loan is an incredible way for you to take benefit of a great deal on a distressed home.

 

By: Karissa

Investing in Real Estate: Ways to Finance a New Home

As the 45th President of the USA, Donald Trump might not be the most popular person on the planet right now. However, the President is also a Real Estate mogul and understands the benefits of investing in real estate. In a nutshell, purchasing property as part of your investment portfolio is a tangible way of ensuring that your portfolio will continue increasing in value long after you pass away.

Real Estate as an Investment

James Kimmons accurately states in his article titled “Why Should I Invest in Real Estate?” that real estate has the potential to provide better returns when compared to other types of investments. He notes that “for most of the 1990s, the Standard & Poor’s Index posted earning yields of 5 to 6 percent on average. At the same time, the S&P’s dividend yields were only around 2 percent or less.” It’s hard to argue with a 5 to 6% earnings yield versus a 2% return.

Furthermore, real estate investments provide monthly rental which will offset the cost of the mortgage taken out to purchase the property. They also appreciate in line with inflation as well as provide an inflation-proof investment. In other words, because your monthly rentals usually increase the same amount as inflation, you will never lose any inflation-related income.

Financing your new home

When you are investing in property, I believe it is important to consider the most cost-effective way to finance a home as well as taking into account the most efficient way to make your money work for you. Therefore, here are several ways to fund the purchase of your new property:

Traditional mortgage

A mortgage from a conventional bank is probably the easiest and most common way of funding your new property. To apply for a traditional mortgage, you need to comply with the bank’s application requirements such as a minimum credit rating and a deposit of a certain percentage of the total loan, amongst other conditions. Should you meet all of the bank’s terms, your mortgage application will be successful, and you will be able to purchase the applicable property.

FHA insured loan

The Federal Housing Association provides loan insurance for mortgage brokers. Because of this insurance, lenders or mortgage brokers are able to “offer FHA loans at attractive interest rates and with less stringent and more flexible qualification requirements.”

Family loans

An alternative source of funding which can benefit both parties is a family loan. For example, if your parents have money that they would normally invest in a savings account of sorts, it might worth their while lending the money to you. This money will then accrue more interest that it would in a savings account. Furthermore, you would save on interest by borrowing this money.

VA loan

If you are a military veteran, you are eligible to apply for a mortgage from the Veterans’ Association. The aim of this loan is to provide long-term financing to military veterans and their surviving spouses. The VA loan is structured in a similar manner to the FHA loan, where a traditional mortgage broker provides the credit, and the VA guarantees a portion of the loan; thus, allowing the lender to give you beneficial rates.

Cash payment

Should you have the total purchase price saved in cash, you can pay for the property in cash. A cash purchase will often garner a better price for the house than if you apply for a mortgage. The simple reason is that the seller will receive the money for the house quicker than if you were to apply for a mortgage.

Securities-based mortgage

Instead of applying for a standard mortgage, you can choose to use a portion of your stock portfolio as collateral for the loan. In other words, the lender will take the shares that you have invested in as a guarantee for the loan. You will then only pay interest on the loan amount. Once the loan term is up, you have the option of selling the shares to pay for the loan, or you can pay the capital amount and retain your stock portfolio as it was before the purchase of your property.

There is more than one way to finance a home. All you need to do is decide which one is the most cost-effective option for you.