Home Loan benefits in Maryland, Washington DC, and Virginia
Buying below market price: In most areas of the United States, foreclosed homes, short sales, and older, outdated houses are available at reduced prices because of their condition. Many of these houses have not been maintained or updated.
Ability to get financing: You may want to buy a home that's almost perfect. However, serious defects may scare you and the lenders off.
If sellers won't fix the problem, you can't buy the house unless you use a renovation loan like a 203k loan. The lender knows you'll fix serious problems that you've agreed to fix, and they can move forward on the deal.
No payment up to 6 months: renovation loans allow you to set money aside for housing while your repairs are completed. You can continue to pay an existing mortgage, or pay rent for up to six months. You won't have to live with an ongoing construction project or come up with two housing payments each month.
Saving money: The renovation rehab loans allow you to hang on to your savings when fixing up a broken-down house. Repairs on a house can be very expensive. If you rely on your savings to get you through, you could run out of money quickly.
Be competitive with other offers: Compete with cash offers and make As-Is offers. In many areas, there is a great deal of competition for foreclosed houses and bank-owned properties. Renovation loans will provide an even playing field with the other bids.
Low cash down payment: Renovation loans offer 3.5% down payment on FHA 203k, and 5% minimum on the Home-Style loan vs. 20% down typically on construction loan programs.
- Location, Location, Location.- Everything you read about real estate tells you location is key. Usually it's hard to find a house that meets the family needs in the perfect location. Well, with a renovation loan you can update, or remodel the home to meet those family needs in the right location.