Posted on: 18th Jan, 2010 09:17 am
IF I buy a "Handyman's special" for much less than the home is worth, can I put money in for improvements and repairs into the original mortgage?
Hi Scarlet,
It is not easy to get a mortgage if you are buying a handyman's special home. The homes of this type are often uninhabitable and need a lot of repair work. Lenders would want to make sure that the property is inhabitable before they approve the mortgage. If the property is not in a good condition, chances are the lenders will not offer loan against it.
Thus, it is important to ascertain how much repair work is needed to make the house inhabitable and determine the approximate costs to complete the repair. If the general condition of the house is good, the lender may offer you a loan to make the purchase and complete the repair.
However, FHA allows 203k loans which can help you make the purchase and also carry out the improvements and repairs. You do not have to take 2 separate loans. You can buy as well as repair with the help of a single mortgage. However, the property needs to meet certain eligibility conditions as specified by HUD.
It is not easy to get a mortgage if you are buying a handyman's special home. The homes of this type are often uninhabitable and need a lot of repair work. Lenders would want to make sure that the property is inhabitable before they approve the mortgage. If the property is not in a good condition, chances are the lenders will not offer loan against it.
Thus, it is important to ascertain how much repair work is needed to make the house inhabitable and determine the approximate costs to complete the repair. If the general condition of the house is good, the lender may offer you a loan to make the purchase and complete the repair.
However, FHA allows 203k loans which can help you make the purchase and also carry out the improvements and repairs. You do not have to take 2 separate loans. You can buy as well as repair with the help of a single mortgage. However, the property needs to meet certain eligibility conditions as specified by HUD.
by all means a 203K loan is the way to go. you can not only do the repairs you need to do, but you can also borrow sufficient funds to make other improvements, even including appliances, if that's your desire. you can check with your favorite local lender or on the fha website to determine what lenders in your area will offer this product.
