It seems kind of silly to have to ask the question, "is that a bedroom?" when you see what obviously looks like one. Our friend, you might just be surprised that what you see might NOT be a bedroom
Fannie Mae HomeStyle Vs FHA 203K Renovation Loan
Maybe you've heard of it, loans that lets you buy a home, and get funds to do some renovation. If you haven't heard of them, they're known as the Fannie Mae HomeStyle®, and FHA 203K Loans. These kinds of loans are perfect for home buyers who want to save money and earn instant equity with a “fixer” home. How do they work? Read on.
Fannie Mae offers two kinds of renovation mortgages, the Homestyle® loan and the FHA 203K renovation mortgage to allow you to borrow based on theimprovedvalue of the property you want to purchase. That means a higher loan amount to cover renovation costs so you can pay less out-of-pocket. When examining costs, the 203K loans are just about the cheapest possible way to fund a major home renovation project. Both loans are “one-time-close” mortgages. That means you apply for a single loan, with one set of documents and closing costs. Some other renovation loan programs require a construction loan upfront, and a refinance later.
In looking at both loans, the FHA 203K program has more flexible guidelines for the borrower, but it does have more strict guidelines for the property. With the 203K, borrowers can have lower FICO scores and higher debt-to-income ratios, a plus when you consider qualification requirements of conventional. If you opt for the 203K, the property must be a primary residence, and “luxury” improvements aren't allowed to be financed. On the other hand, HomeStyle® has more strict guidelines for the borrower, requiring higher credit scores and lower debt-to-income ratios and lesser restriction on the property type. HomeStyle®allows you to purchase primary, vacation, and rental properties.
Mortgages are sometimes complicated processes, and we've just scratched the surface on these two Fannie Mae renovation mortgages. How about we sit down and talk a little more? Call us at(423) 433-6517, or just stop by our office inside Keller Williams Realty at 1033 Hamilton Place in Johnson City. We'll scratch off some more!
Wes Shields, Team Owner and Listing Agent for The Shields Team at Keller Williams Realty of Johnson City Tennessee, has a long and very impressive list of accomplishments in his 10+ years in the real ....
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