Short sales and foreclosures are common topics lately. In light of the mortgage crisis, there will be something for just about everyone to choose from in these areas. Of course, most of the time people assume that these deals are for investors only. It can be tricky to deal with them, after all, because of all of the rules and stipulations that they involve. Make sure that you take the time to check out the different options that you have and learn what these loans can do for you. It's not impossible to use the FHA 203k loan, but you do have to meet specific criteria.
Banks are scared of these loans because they're a big risk. Even though they are government insured, they're still putting a lender in a big position for loss because things might not go how they're supposed to. Plus, lenders like faster closing and the 203k takes a long time because it involves a lot of paperwork. The 203k has a lot of rules, contingencies, and guidelines that have to be dealt with. That's why it takes a consultant and a lot of education for you to be able to use these loans and why they're not the best investment vehicle if you have other options. There is something to be said for getting the facts about this type of loan before you get involved. Some people will tell you that it's harder to get this kind of loan or that you shouldn't do it, but that's hardly the case.
Things have worked out well for many buyers. There are so many goals and dreams that people have and the number of homes that are under foreclosure or short sale are a great way to make them come true. You can buy a single family home and turn it into your dream home. You can even buy a multi-family property and convert it into a gorgeous, huge home for your family. There is nothing that you can't do as long as you follow the guidelines of the FHA 203k mortgage loan when you're applying. The repair allowances even say that you can move a home to a new foundation or use an existing foundation to completely rebuild. Talk about options.
Putting in an offer is tricky. If the work that needs done is structural, you're only going to be approved for up to 110% of the improved value of the property. That means if you buy it for $75,000 and it needs $10,000 in repairs, you had better hope that it appraises for at least $77,500. Otherwise, it's not going to be feasible or be a good investment.
The challenge is to figure out how to put your money where your dreams are and figure out how to get involved with this kind of loan. You never have to worry about having cash for the repairs, though, so that definitely helps. You don't need to have cash with a loan like this. You just have to have a down payment (or a means to get one) and a desire to try out something new with home ownership. If this is something that you might be interested in, you should talk to a professional who will help you figure out what's best for you and if this can give you the home that you've been looking for.
If you peruse the internet, you can find good stories of success from people who have navigated this market on their own and had a good experience. That will make it easier for you to have faith in your own decisions, even though it is a big risk to take for some people. Anyone who wants to own a home and needs some assistance might be able to benefit from the FHA 203k because it gives them all the money they need to create the home of their dreams, within reason.