If you are dreaming of any kind of renovation (new garden, kitchen, or terrace) but can’t afford it, it’s time to consider home renovation loans. These loans finance any kind of renovation made to your house. They are more beneficial as traditional personal loans.
203 k renovation loans are the kind of the rehab loans that allow homeowners or purchasers limiting loan-closing costs. It happens because a borrower applies for one lump of sum – he doesn’t need separate loans for each kind (for mortgage and for repairing).
Government finances such loans for borrowers, who want to purchase home and make upgrades there. If you only need to make upgrades, repairs, renovation, you still can apply for 203k renovation loans.
FHA 203(k) loan offers very flexible terms and down payment as low as 3.5%. Borrowers must have a credit score higher than 620. A borrower shouldn’t be a first-time homebuyer to qualify for the loan.
You can apply for the Limited K and the “standard” Consultant K. The Limited K loan is designed for a house without structural or foundational problems. If the renovation costs are less than $35,000, you can apply for this kind of the rehab loan. In other cases, you should consider Consultant K loan.
The cost of the loan will also vary depending on the types and sizes of renovation. Therefore, before signing the contract, make an appointment with a specialist and understand what you can expect from the FHA 203k renovation loans.