FHA 203k Loans: What Are They? What Are the Benefits?

Original Article Was Posted on www.Zillow.com by Andrea Smolin

FHA 203k Loans: What Are They? 

What Are the Benefits?

Getting a Mortgage Loan for a Fixer-Upper: A Primer on FHA 203k Loans

The idea of buying a fixer-upper and turning it into your dream abode can seem so perfect -- every nook and cranny just to your specifications! The reality, however, can be harsh. When you realize how much it will cost to remodel, you often also realize that you can't afford it. Or you find out that a lender won't give you a loan because the home is considered “uninhabitable” as it is. That's where an FHA 203k loan comes in.

An FHA 203k loan is a loan backed by the federal government and given to buyers who want to buy a damaged or older home and do repairs on it. Here's how it works: Let's say you want to buy a home that needs a brand-new bathroom and kitchen. An FHA 203k lender would then give you the money to buy (or refinance) the house plus the money to do the necessary renovations to the kitchen and bathroom. Often the loan will also include: 1) an up to 20 percent “contingency reserve” so that you will have the funds to complete the remodel in the event it ends up costing more than the estimates suggested and/or 2) a provision that gives you up to about six months of mortgage payments so you can live elsewhere while you're remodeling, but still pay the mortgage payments on the new home.

Which repairs qualify?

There are two main types of FHA 203k mortgage loans. The first is the regular 203k, which is given for properties that need structural repairs such as a new roof or a room addition; the second is the streamlined 203k, which is given for non-structural repairs such as painting and new appliances. Among the other repairs that an FHA 203k will cover: decks, patios, bathroom and kitchen remodels, flooring, plumbing, new siding, additions to the home such as a second story, and heating and air conditioning systems. The program will not cover so-called “luxury” improvements such as adding a tennis court or pool to the property.

How much money can you get?

The maximum amount of money a lender will give you under an FHA 203k depends on the type of loan you get (regular vs. streamlined). With a regular FHA 203k, the maximum amount you can get is the lesser of these two amounts: 1) the as-is value of the property plus repair costs, or 2) 110 percent of the estimated value of the property once you do the repairs. With a streamlined loan, you can get a loan for the purchase price of the home plus up to $35,000. To determine the as-is value of the property or the estimated value of the property post-repair, you may need to have an appraisal done. You will be required to put down 3.5 percent, but the money can come from a family member, employer or charitable organization.

What kinds of properties qualify?

Qualifying homes include: a one- to four-family home that has been completed for a least a year; a home that has been torn down, provided that some of the existing foundation is still in place; a home that you want to move to a new location. The home cannot be a co-op, but some condos are eligible. Your property will also have to qualify under the usual FHA requirements. For example, its value cannot exceed a certain maximum amount, which depends on where you live.

What are the pros and cons of these loans?

The main benefit of these loans is that they give you the ability to buy a home in need of repairs that you might not otherwise have been able to afford to buy. Plus, the down payment requirements are minimal, and often you get decent interest rates (note that the interest rates and discount points will vary by 203k lender, so it's important to make sure that you're getting a good deal on the loan).

The downsides are that not all properties qualify, there are limits on the funding you can get and applying for the loan isn't easy. For example, to apply for the loan you may need to hire an independent consultant to prepare the exhibits required (to get the loan, you have to provide a detailed proposal of the work you want to do and cost estimates for each item). For more information on 203k loans, check out.

Joe Barbee

Elite Realtors of Georgia

www.WarnerRobinsHouseHunter.com

Foreclosures For Sale In Warner Robins, Ga

         Click on the link below for a list of foreclosure Listings in Warner Robins, GA!!

                                                      Warner Robins Foreclosures

               If you are interested in ANY of the homes, please give me a call at 478-978-3428

                                                                           OR

                                     You can email be at TheBarbeeTeam@Gmail.com

Joe Barbee

Associate Broker

Elite Realtors of Georgia

478-978-3428

www.WarnerRobinsHouseHunter.com

www.WarnerRobinsRealtor.com

                                              We Would Love To Earn Your Business!!!

Make Relocating to Warner Robins an Invigorating Fresh Start

Relocating to Warner Robins can be an invigorating fresh start: an opening to unexplored opportunities and a brand new community filled with tomorrow’s life-long friends. Then again, faced with a sudden onslaught of details and decisions, it can be an experience that falls just short of overwhelming. Every year, 43,000,000 Americans move to a new home, yet the Employee Relocation Council says that moving is the third most stressful event in a person’s life.

If you are relocating to Middle Georgia anytime soon, there is much that you can do to ensure the more positive outcome. Whether you will move for professional reasons or just to take advantage of the lifestyle Middle Ga offers, you will cut down on anxiety when you take positive steps to orient yourself ahead of time.

If at all possible, make a few excursions to Warner Robins well in advance of your move. Make them mini-vacations: when you check into a local hotel or motel for a few days with no pressing agenda, you’ll be free to learn a lot about your new town, discover some of what will become your new favorite place, and just plain get familiar with what is where (and how to get there). Later, when you’re in the midst of relocating to Middle Ga, there won’t be any free time for that kind of leisurely investigation.

Be sure to visit our Warner Robins Chamber of Commerce early during your first stay. You’ll find loads of resources to help you familiarize yourself with the whole region. From welcome packets that include coupons and a list of things to do, to specific question-answering advice and help, the C of C is a great free resource for future residents.

Even further in advance, once relocating to Warner Robins looks likely, whether you plan to buy or lease, get in touch with a local Realtor^®.  There is no better source for insider guidance on schools, which neighborhoods are the best for your needs, and invaluable help in finding and landing your new residence.

Advance planning will make relocating to Warner Robins a positive and efficient experience— and it’s my business to help that happen for my clients. Contemplating relocating to town in 2014? A call to me now is a great way to get started!

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Warner Robins Real Estate Reflected Overall 2013 Uptrends

It’s time for this Warner Robins Realtor observer to tackle the New Year’s roundup of the Year in Real Estate (along with the traditional disclaimer that, since the actual statistics won’t be tallied until 2014, this has to be a lot more sizzle than steak!) But this is one time in the year when we local residents get to take pause to relax, perhaps put a bottle of bubbly in the fridge for later on, and take a sweeping view of the general direction of things across the land.

If you’ve been reading here throughout the year, you already know that 2013 Middle Ga real estate activity might easily justify chilling a superior vintage champagne: it’s been a pretty darn good year! A smattering of last week’s press reports confirms it:

·         * From the East Coast to Oahu (where there was a “1 in 3 chance” that if you sold a house, it was for more than the asking price), reports were of steadily rising prices.

·         * The Business Insider reported that the Big Apple “managed to shatter several real estate records in 2013.” One of the records was a tidy listing for a modest little 62,000 sq. ft. private coop residence. Sure, $130 million may sound a little steep to us here in Warner Robins, but that might be because so few of our digs have 82-foot swimming pools or tennis courts…at least not indoors, inside our five-story apartment atop a skyscraper.

·         * More down to earth might be NAR’s assessment that “Housing prices rose faster than expected” — with a lot of credit given to the fact that “affordability remained high.”

·         * Another factor: “More first-time buyers” were entering the market due to “rising rents and pent-up demand.”

·         * Following suit, the Dallas News was touting a local home market that “came roaring back in 2013;” one that had “builders rushing to keep up with demand for new houses.”

·         * The Realtor® web awarded credit for the strong real estate year to “Low mortgage rates, all-cash buyers, and tight inventories” that sustained the housing market recovery. Our area real estate saw much of the same. 

·      *   There was one notably bleak spot: “ACT real estate hit hard by election” the Times reported. “Uncertainty” about election politics had created “subdued performance during the year” and some “negative house price growth.” The best news: this was the Canberra Times – and the country was Australia!

So let’s wish those Down Under a quick turnaround; then, after a relaxing day watching the Rose Parade and a bowl game or two, let’s get ready to charge into an equally dynamic 2014.

Happy New Year, everyone!

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Renting a Warner Robins Home: Key Miscues to Avoid

   With housing prices on the rebound, it’s easy to see why some Middle Georgia homeowners find buying an additional property an increasingly attractive possibility. Getting into the landlord business offers the appeal of a growth investment coupled with the possibility of a favorable cash flow situation.



That said, make no mistake about it: renting a home in Warner Robins is its own business enterprise. Becoming a landlord means making business decisions that carry elements of risk as well as reward. When renting a home in Warner Robins, there are a number of common — but avoidable — first-time landlord mistakes:



Fair Housing Violations


From the moment you begin marketing your income property, the language in your ad can easily run afoul of the fair housing rules that prohibit discrimination. Avoid phrases that single out any particular group or profile, such as “family-friendly,” “suitable for a couple,” or “singles only.” Since violations can run up to six figures, make sure your ad simply describes the property and the neighborhood in generic terms — and be prepared to accept the first qualified applicant who meets your terms.



Credit Report Mistakes


Another common mistake when renting a home in Warner Robins is to fail to adequately qualify applicants. Today, accepting credit reports supplied by the applicants themselves is a gamble. Run credit reports yourself (including an eviction check for every applicant over the age of 18). You want to see the history of ALL applicants who will be living in your Mid Ga income property.



Security Deposit Mistakes


When it comes to the security deposit, taking too much – or not enough – is another common first-timer misstep. Too little and you won’t have enough protection; too much, and you risk violating state regulations (with the possibility of jeopardizing your right to use any of the funds!).

Renting a Warner Robins home can be an outstanding wealth-building venture, but your responsibilities as landlord must be taken seriously. For anyone unsure about legal requirements, hiring a professional property management agency can make good business sense. I’m here with recommendations for my clients on these and all other matters that accompany your local real estate opportunities.

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Distinguishing a Good Warner Robins Foreclosure from a “Walkaway”

While it makes perfect sense to assume that a Warner Robins Foreclosure should be more affordable than a non-foreclosure, not every one constitutes a great bargain. Even if the goal is to land your next residence, a worthwhile way to gauge the value of any foreclosure is to look at it from an investor’s point of view: would the property yield worthwhile returns?

Determining that involves using some common benchmarks. Here are some of the leading factors that contribute to making a cool foreclosure evaluation:



How much did other houses sell for locally?



While the price of a property you are looking at may strike you as quite affordable, whether it represents true value is only apparent when compared with recent area market trends. According to Calculated Risk, the discounts foreclosure buyers are finding have begun “to drop to pre-crisis levels.” That lines up with other evidence that the foreclosure market is stabilizing as underlying home values and inventories rise. In any case, be sure to have your agent provide comps for similar properties sold in the area.



How many houses are vacant in the neighborhood?



Some neighborhoods have a considerably higher foreclosure rate than others do. If the neighborhood you’re evaluating incorporates a high number of vacant properties, the price should reflect that. Such areas tend to be relatively unattractive to other buyers for a number of reasons (including a tendency toward higher crime rates). Even if you have no intention of reselling or renting out the foreclosure you are considering, the neighborhood’s character should be factored into your decision.



Cost to renovate?



While it’s hardly unusual for a foreclosure in town to need some work, the details can be decisive. Ask an appraiser to go over the property. A good one will be able to give you a close approximation of the extent of renovation you should expect.




Great deals can be found in unexpected places – sometimes it just takes the help of a great agent to uncover.  If you are considering buying a local home - foreclosure or not – I hope you will give me a call!

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Landing Residential Rentals When Credit Scores Intrude

Would-be tenants for the best Middle Ga residential rentals can find it tough going when a tarnished credit report is part of their financial profile. As the economy continues its slow-mo bounce-back, many individuals and families who have weathered the worst of the downturn find themselves saddled with credit scores that are unpleasant reminders of lost jobs, cutbacks, and the rest.


Even if some of the most desirable residential rentals in Warner Robins are plainly within your ability to pay, earlier credit slipups can create a roadblock. A low score is a problem for landlords. They may sympathize, but still must decide between you and other applicants who, by the numbers, present a more prudent choice

.


There is no shortcut that will guarantee that a credit-challenged applicant will land his or her choice of residential rentals 100% of the time, but I can offer some insights into the traits that most often reward others in the same boat. They’re pretty straightforward:


Unblinking honesty. Address your credit history — and the reasons it’s still disappointing — in a personal discussion with the decision-maker (landlord or agent). Just about everyone understands that life isn’t always fair, that everyone has made some bad judgments, and that success usually requires learning from a failure or two. Since your credit score will never go unnoticed, take the issue on directly and without embarrassment.

Persistence. Be willing to comb through the available Middle Ga residential rentals for as long as it takes to land one that you are happy to call “home.” It really is true that toughing your way through multiple rejections builds character. When you feel discouraged, take the day off — but then bounce right back and go at it again!

Maturity. Rebuilding a strong credit score doesn’t just take time, it takes the ability to delay gratification. Even if it turns out that some of the best Warner Robins residential rentals are out of reach right now, if you are willing to forego the temptations of a charge card lifestyle, eventually you will succeed. And if I can be helpful anywhere in the process, do give me a call!

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Warner Robins Property Ownership: Retirement ‘Ace in the Hole’

The other day I ran across some eyebrow-raising financial trivia. There’s a takeaway that should be encouraging for everyone who already own property in town.

The undeniable value of home ownership is pretty clear when you take a look at some of these financial facts

According to the Employee Benefit Research Institute, 56% of workers report that they haven’t even attempted to calculate how much money they will need for a comfortable retirement. That should get them thinking (although it looks like it hasn’t). If the Center for Retirement Research is right that only 42% of private sector workers have any retirement savings at all, it might explain why they don’t want to think about it.

I believe we can safely ignore Fidelity Investments’ finding that a 65-year-old couple retiring last year would require an estimated $240,000 for retirement medical expenses. Not that they will require more or less, but with the Affordable Care Act currently being eyed suspiciously by politicians in both parties, who knows how much (or what proportion) of care will be provided by…who knows?

On the brighter side, a certain degree of realism seems to have crept into the general populace. That is, if the Employee Benefit Research Institute is right that only 14% of American workers are very confident they will have enough money to live ‘comfortably’ in retirement. It’s undoubtedly why more and more Americans are planning on working well past the former retirement age.

What you can deduce from these facts is how much brighter your own future is if you have owned your own local property for a while. Owning your property free and clear puts that shelter expense money back in your pocket. From the moment you make the final mortgage payment, the likelihood of having a ‘comfortable’ retirement goes up dramatically.

It’s why the American Dream of owning property is such a great wealth-building tool: one that forces long-term saving regardless of how daily living pulls in the opposite direction. If you haven’t started building your own property ownership yet, I’m here to show you how to make it happen!

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Options for Buying a Home After a Foreclosure

   “Time flies when you’re having a good time” we hear. But time can also pass quickly for those who've had to go through difficult times. Case in point is a million and a half borrowers who have recently experienced the pain of a foreclosure. That’s the estimated number of those who, by this time next year, will have waited long enough to again become eligible for an FHA loan.

    Anyone interested in buying a Mid Ga home after a foreclosure has come through a tough period. The standard waiting period for an FHA-guaranteed loan is 3-4 years following a foreclosure or short sale (though individual circumstances vary). Now that the weeks and months have ticked by, this sizable crop of newly eligible prospective ‘boomerang buyers’ may soon find themselves contemplating the option of buying a home after a foreclosure.

   That estimate of the size of the newly eligible was provided by Moody’s Analytics. Since they are key players in determining creditworthiness, it’s a source I trust. A chart of Moody’s count from the second quarter in 2011 (when their number was a mere 285,000) to next year’s second quarter 1,500,000 provides a convincingly uphill slope.

    Still, being eligible to apply does not mean automatically qualifying for an FHA (or any other) loan. Success in buying a Warner Robins home after a foreclosure continues to depend on the same standards that always apply. After the waiting game is over, having cured credit damage will become the prime requirement.

   To increase their chances of successfully buying a home after a foreclosure, Warner Robins prospects will have paid existing credit card and loan debts with the kind of unfailing regularity that reassures loan officers and credit analysts alike. If that hasn't been the case, the time to begin is ASAP.

   Website Zillow predicts the next most influential group of buyers will be those who are looking to buy a home after a foreclosure or short sale. Houston County residents who are among them — and who are ready to make this their turnaround season — should give me a call. We can get started with the pre-approval process!

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

www.MidGaHouseHunter.com

www.WarnerRobinsHouseHunter.com

When a Kitchen Shines....Buyers Take Notice

        Keeping control of your kitchen is one of the most basic actions you can take to help your real estate agent sell your home. The execution can be simple when it’s approached systematically.

         Especially during winter, kitchen control can seem an all but unmanageable task. Days are shorter; kids or pets may be cooped up inside; and everyone tracks winter through the kitchen all day long.  To help you keep your kitchen looking great (and your  real estate agent beaming), some simple preparation is needed. That, plus sticking to a simple routine, will turn the impossible into a ‘done deal.’

· * Put appliances and gadgets away as soon as you use them. According to Realtor.com, removing the least frequently used items from kitchen counters is a proven way to make a home more inviting. Include items like can openers and coffee pots.  Flowers and a few cookbooks, though, are welcome to stay.

· * Spot-check nightly: More times than not, you will find items you missed putting away or cleaning during the busy part of your day. It's easy to miss crumbs on the counter or dirt on the floor when you are trying to get out of the door for work or a meeting.

· * Consider eating pre-prepared meals (or ordering delivery) during periods when you know you will be actively showing the house. This will help with kitchen cleanliness, leave less work for you, and have the significant side effect of making the selling process less crazy-making. Cost a bit extra? Uncle Sam won’t think so, but for yourself, consider it a worthwhile business expense.

       Every Real Estate Agent will agree that kitchens are a key selling point these days, so the effort you put into kitchen control is one of the top ways you have of bringing in top dollar for your Warner Robins home.  Another way -- one I’m happy to offer -- is to call me! I am here to help you make the most of every step of the selling process.                                                    

      www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com