do I qualify for a 203 (k) fha loan?
i want to buy a home for 18000 dollars. It needs some work on the inside. it needs all the carpet , trim , and paint in every room. it also needs some electrical work about 1 to 2 thousand dollars worth.. the realiter said that the house which is a hud home wouldnt qualify for an fha backed loan because of its condition. someone told me about the fha 203 k rehabilitation loan and i was wondering if any one knows if that might work for me or not?
- loanmasteroneLv 71 decade agoFavorite Answer
203B HUD or FHA backed mortgages are geared toward getting the house back into condition for people to live in. In order to find out if this as well as you qualify for the FHA 203 you must apply for this type mortgage.
In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.
Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.
He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.
The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.
When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.
#1 One month of pay stubs for each person that will be on the mortgage.
#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.
#3 Two years of federal income tax along with the W-2 that match.
Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.
Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.
Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.
If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.
You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.
Make sure your mortgage broker explain all your options so you may make an intelligent decision.
What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.
So select the best option for you and your financial situation.
You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.
Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.
Your mortgage broker will now order an appraisal to show proof of the property value.
The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.
After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.
Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.
I hope this has been of some benefit to you, good luck
- LoneRangerLv 41 decade ago
Well, i don;t know if YOU qualify for a 203k (rehabilitation) loan or not, but I sell a lot of HUD homes.
HUD sells them 3 different ways,
1. on a cash basis (or conventional financing not involving HUD)
2. preapproved for FHA financing
3. preapproved for FHA 203k financing
It will say right on HUD's website what they are offering, and what is offered is based on the condition of the property.
I will also tell you, unless the home is pre-approved for a 203k, they are a LOT of extra work and time involved in getting one...and I mean a very lot of extra work and time.
Only a qualified mortage company can tell you if YOU are approved or not. The other issue is most lenders have a minimum mortage amount, and it is always was more than 18k.
And finally, because it is listed for 18k doesn't mean it will sell for that. I've seen many sell for double the asking price to a cash buyer. You can also look at bid statistics for oterh HUD homes that have sold on their site and see what other places have been selling for in relationship to the asking price.Source(s): RE Broker
- RealtoratheartLv 61 decade ago
You'll need to talk with a FHA loan officer to see if YOU qualify to borrow the money. While the house may not pass FHA guidelines in it's current condition, if you qualify to purchase it, you could potential have them write the loan as a 203K. Once the repairs are complete, the loan is converted to a straight FHA loan. Also, check with the city and county to see if they might have funds available to help you repair this property.
- Anonymous1 decade ago
If you are new to the world of loans, then all the jargon and terminology can seem very confusing. There are so many different terms to understand, and unless you know some of them you will not find the best loan deal to suit your needs. If you want to know more, then here is a guide to some of the basic loan terms you might need to know.
The lower the APR, then the cheaper the loan interest will be. Credit scoring is a method that lenders use to determine your eligibility for a loan. They ask a series of questions about your earnings and financial situation. Each answer you give is scored, and the better your score then the more likely you are to be accepted for a loan.
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- KathleenLv 44 years ago
a mortgage broker is not a gov official; he will ask you some questions and he may seek $ for a credit report or other--my comment is not to offer to pay for any of his processes--let any loan he gets you pay him at close of escrow. can guide you further