203K Rehab Loans NC

There are many misconceptions about these loans that have people confused about what exactly they offer. Many would-be homeowners are stuck thinking that the only home they could afford is a distressed home, but that they cannot possibly afford the repairs. This leaves many people feeling as though they could never own their own home.

Where Do I Begin?

The first step is to discuss a 203K loan with multiple lenders until you find the one that is right for you. You want someone experienced with NC 203K loans and not someone who is just starting to work with them. Once you have secured your small down payment, as little as 3.5%, you can begin looking at homes.

Why a Distressed Home?

The best deals on the market, for short term and long term, tend to be distressed properties. The old adage is that you should buy the worst house in the best neighborhood. These leave you open to renovate the house and further increase its value while a nice house in a lower quality neighborhood will not increase in value beyond a certain point.

How Does a 203K Loan Make Any Home a Dream Home?

Remember that you can always change the house, but you can never change the neighborhood. A 203K loan allows you to renovate and remodel a house even if you don't have that money set aside in the bank.

These renovation loans let you borrow the money in a package with your home loan. What this means is that you can buy a distressed house on a great lot and pay off the renovation costs over time, meaning you can get a great deal on a distressed home and turn it into your dream home.

Dealing With a Real Estate Agent

Some real estate agents may not be forthcoming with information about a 203K loan because they do not fully understand them. Some agents may be under the impression that they are only good for dilapidated housing in need of major repair. This is not true. 203K loans are restricted to non-structural renovations which are intended to improve the quality of a livable house.

Is a 203K Loan Expensive?

Because of their nature, 203K loans will usually have an extra 1/4% on the rate which is very affordable. The added costs of the renovation aspect of the loan may cause additional fees, but these are costs that are normally paid for out of pocket and can be prohibitively expensive to many people. By packaging them with the loan and paying out over time, you can make an expensive process affordable in the long run.

A 203K renovation loan is a great option for someone looking to buy a house in a neighborhood where normally they may not be able to afford a house. When a house needs repairs and renovations to sell, banks tend to want to unload them quickly. With a 203K loan you can take advantage of this by getting a distressed house in a great neighborhood and turning it into the home you have always wanted to own.