Real Estate
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Buying house/remodel loan

1,064 Views | 3 Replies | Last: 7 yr ago by aggiefan2002
AustinCountyAg
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My wife and I are thinking of buying a home but it will have to be remodeled. Can someone give me a brief description on the type of loan options their are.

We are thinking home purchase wiill be $150k and remodel cost around 70k. We will have around 20-25k to put down. We are not using a realtor for the purchase.
tford12
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AG
203K Loan
Jay@AgsReward.com
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AG
There is the above mentioned FHA 203k loan as well as a conventional product called Homestyle. Both of these programs allow you to borrow based on the after repair value of the house as determined by an appraiser. You can go up to 95% on the conventional product and a little higher on the FHA product. So, you would be able to finance the vast majority of the rehab costs.

The30 year fixed interest rate would be higher then it would be in you were just buying the house but much lower then second lien home improvement loans. They do have a lot more moving parts then a straight purchase loan but can solve the renovation problem.
AustinCountyAg
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What's the deal with payments. I spoke briefly with a friend who does financing for the local bank and he made a comment of something like we only have to pay interest payments while remodel is taking place? We won't have to make full payments until we move in?
aggiefan2002
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Typically you only pay interest on what you've used. This is based on the draws the you take as the work is completed. But I've never done a loan like this one.
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