203kHome Enhancement
Section 203(k) insurance enables homebuyers and homeowners to finance either (or both) the purchase and/or refinancing of their home including the cost of its repair and upgrades through an individual mortgage. It allows them to finance the repairs or upgrades of their existing homes.
This kind of mortgage (203k) fills a specific and crucial need for homebuyers. When purchasing a home that needs some repair or modification, homebuyers typically have to follow a complex and often prohibitively costly process. Loans required for this kind of homebuyer usually have high interest rates, balloon payments, and short payment terms. 203(k) offers a solution that helps the buyer by providing a single, long term (fixed or adjustable) rate loan that helps to cover the purchase and the repair and upgrading of the property.
Here are some things you should know about the 203(k) mortgage:
- Section 203(k) covers the purchase or rehab of a home that is at least one year in age
- The loan proceeds are used to pay the seller of the home while the remainder is placed in escrow and released as the rehab process is completed
- The cost of the repairs or rehabilitation of the home must be at least $5,000.00
- There is no specific maximum repair amount and will depend upon the scope of the work.
The section 203(k) mortgage fits a unique need and has many benefits and uses for homebuyers. Our qualified mortgage professionals are standing by to help guide you through this task that may be very confusing if going through it for the first time. Call us today at 800.965.0437 or click here to contact a CHL loan expert right away.
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