FHA 203k Rehab Loan
What is FHA 203k loan
An FHA 203k rehab loan is a very popular loan that many people use to fix up houses. With a 203k loan, you get access to a government-backed loan program to get the money you need. There are many aspects involved in the FHA 203k loan program and they have advantages and disadvantages associated with them. Here are a few things that you should consider before getting involved in a 203k rehab loan.
Savings: The 203k rehab loan allows you to hang on to your savings when fixing up a broken-down house. Repairs on a house can be very expensive. If you rely on your savings to get you through, you could run out of money quickly. What is worse, you might not be able to resell the house and then your savings are depleted. With a 203k loan plan you can borrow the money from someone else and still repair the house.
Low interest: When you deal with the FHA, you will get a better than average interest rate on the money you need to borrow. Many rehab loans in the commercial marketplace can be very expensive. With a 203k rehab loan, you know that you will be getting a fair interest rate.
Great deals: Rehab loans are designed for "fixer-uppers." Therefore, this loan will allow you to qualify for a home purchase that many other programs would not. You can get a house at a lower price than you normally would be able to on the open market.