Remodel Your Home with the 203k
You can pay for your home remodel dreams with a mortgage loan called the FHA 203k. If your kitchen is outdated and it's time for a new fridge, stove and cabinets, you might be a bit overwhelmed thinking about how to pay for it all. Maybe you need to add a bathroom to your house but you don't know how to finance the work. Old windows? Old roof? Chipping paint or cracked siding? All of these scenarios are common in homes across the country. And with equity such a rare commoduty, paying for these home improvements and remodeling projects can be difficult.
FHA 203k
One option for homeowners is to refinance and remodel. To do this, you need to understand the 203k home improvement loan. This option from FHA was first meant to help home buyers turn less-than-desirable housing into a dream home with renovations and remodeling. It's evolvedinto a way for people like you who own their home to update it and pay for home improvements, all in one mortgage note.
The 203k is not a home equity loan based on current values. It's a new mortgage based on the after-improved value of the home, once the work in completed. In other words, you're borrowing money to pay for upgrades that will justify the amount of the loan. And it's all in one mortgage with one interest rate - it's not a second mortgage or HELOC.
The home improvement projects mentioned back in the first paragraph are all eligible for 203k financing. You could also replace old carpet or flooring, fix a driveway or build a garage, or even add a deck to your home. Of course, all of the work depends on whether it adds value to the home, but almost anything short of luxury items like a pool or barbecue pit are included in these remodeling options.
Since the 203k is part of the FHA umbrella of programs, it does require a 3.5% down payment. As with the standard FHA mortgage, your options for financing the down payment include gifts.
You can learn more about paying for upgrades and remodeling with our free eBook "The Complete Guide to Spring Home Improvement Financing" at the button below. In the eBook you'll find a list of 10 home improvement projects you can finance with the 203k, as well as another 10 you don't financing for at all. It's really up to you on whether you can do the work yourself or you want to pay for a professional to do it. Get your copy today and get started on your remodeling dreams!
(kitchen photo: Flickr user Vala Vella)