Archive for February, 2010
Basics of Rehab Loans
Rehab loans can be used for buying and fixing an existing property. Through rehab loans, you can borrow an amount that is equivalent to the after repaired value (ARV) of the property. The ARV is based on the appraiser’s estimate. For instance, when the appraiser declares that your rehabbed or remodeled property is worth $250,000 once completed, then you will be able to loan 60% to 90% of that amount to purchase a property or renovate it.
In applying for a rehab loan, there are two important factors that you need to consider: the amount of money that you currently have and your current credit score. When you are qualified to loan 90% of the ARV, you are required to pay 10% of your down payment in order to complete the full 100% of the budget to finish the project. Your contribution may come from cash you have deposited in the bank for at least two months, a gift from a close relative or a secured credit line like home equity line of credit. On the other hand, if you cannot meet these requirements, ask your broker for other alternatives. Your contractor may be required to create a budget plan for the project as well as its timeline. The fund for your rehab project will depend on the budget plan and timeline from your contractor.
After the completion of the project, the majority of the lenders will offer to make your rehab loan a permanent loan. They will also charge you with certain percentage that varies from the agreement between you and the lender. Interest rates may range from 3% to 12% of the loan amount. However, when you did not pay any down payment, the interest rate may reach 8% to 15%.
Hard Money Real Estate Loans
At this point of time, hard money real estate loans can prove to be of ultimate help. So let us discuss all the relevant details about hard money real estate loans. Hard money real estate loans are basically short term loans and therefore, the rate of interest is higher, as compared to other loans. These are called hard money real estate loans because of its strict terms and conditions.
For hard money real estate loans, you need to offer some of your assets as collateral to secure the loan amount. This way, you can find nominal rates and several additional benefits of hard money real estate loans. If we talk about the criterion to avail hard money real estate loans, you need to offer some important documents like bank statements, residential proof, age proof etc. One can make use of hard money real estate loans for procuring new property. Search well and crack the best deal of hard money real estate loans.
Downpayment Assistance
The clock is ticking down on the controversial practice of sellers providing homebuyers downpayment assistance. The new law prohibits the federal housing administration from insuring loans made with seller-funded downpayment assistance, which is a ban of the practice since fha guarantees are needed for most loans made to low and moderate income borrowers.
According to the “fact vs myth” list, many of the arguments against downpayment assistance aren’t valid. For example, it contends that fha users who purchase homes with downpayment assistance through a non-profit “have a 94% rate of successful homeownership. You may be surprised at how flexible sellers are in the current market and how many programs there are that provide downpayment assistance to applicants for fha financing to purchase florida homes, condos, and townhouses.
Although the fha loan does not have a zero down mortgage option yet, you will find that your 1st continental mortgage loan officer can point you to many downpayment assistance programs that work well with florida fha home loans. There are many financing options & programs for 1st time home buyers including lower interest rates, downpayment assistance or cash back at closing. The building equity & growth in neighborhoods (begin) program offers downpayment assistance with varying loan amounts in specific developments for low to moderate income first time buyers of san jose homes for sale. Some borrowers got around downpayment requirements by using seller-funded downpayment assistance programs (dpa), in which a seller gives money to a charitable organizations that then give the money to them. The goal was to provide a maximum downpayment assistance grant of either $10,000 or six percent of the purchase price of the home, whichever was greater.