Many potential Oakland County home buyers in today’s market are looking for creative ways to purchase homes. There are a couple of options which are widely overlooked but present opportunities to accomplish specific goals of buyers in the market. If you want to buy a house that needs minor repairs – perhaps a new roof, an updated kitchen or bath, new appliances, etc – can you incorporate that into the loan to purchase the house? What if you want to buy a home and put zero down? Many people believe that these things are not possible but if you are working with a great lender that has all of the available options at their fingertips and knows how to use them these things can be done!
An FHA loan is a mortgage loan that is insured by the Federal Housing Administration and because the loan is insured lenders are willing to make these loans are more flexible terms than a conventional loan. This means credit standards are not as tight and down payment requirements are lower. Right now the minimum down payment for an FHA loan is only 3.5% and credit scores of 620 are approvable. The 203(k) loan is a variation on the FHA loan which allows you to buy a house with only 3.5% down and borrow extra money to make specific improvements to the home you are buying. These improvements can include roof, electrical system or plumbing upgrades, flooring, remodeling of kitchen or bath, appliances, window or door replacement, etc (structural problem repairs are not allowed and neither are room additions). What you have to do is get a contractor estimate for the specific repairs and then we appraise the home on an “as completed” basis – the appraisal is based on what the home is worth after the improvements have been completed. The homebuyer is responsible for monitoring and completing the work after buying the house and the repairs may be inspected by the lender. The maximum loan amount can be 100 – 110% of the finished value (the buyer still has to make the minimum 3.5% down payment based on the purchase price of the home). The maximum amount available for repairs can be as high as $30,000 and the current loan limit for FHA loans in our area (SE Michigan) is set at $297,500. This is a great way to buy a house that needs some TLC and finance the repairs at the time of purchase!
A VA loan is insured by the Veterans Administration and is made to eligible veterans of the U.S. Armed Forces. Much like an FHA loan, the VA loan guarantee makes lenders willing to offer these loans at more flexible terms than conventional loans. Depending on the eligibility of the individual veteran it is possible to purchase a home up to $417,000 and put zero down! The seller can even pay up to 4% of the sales price to cover the buyers closing costs, property taxes, etc. This could be used to allow someone to buy a home in today’s market with little or no money out of pocket! Wow, I thought somebody told me zero down loans were all gone?
Working with an experienced, well informed lender that has the right tools and knows how to use them is a must in today’s challenging times. I have the experience and the tools to help you make your dream house a reality so feel free to contact me to discuss options to accomplish your goals.