With the help of an FHA 203k loan, you can make major repairs on a West Knoxville foreclosure or do something as simple as replacing carpet and repainting, with as little as 3.5% down. So, what exactly is a 203k loan? And, is it the right loan for you to buy a West Knoxville home for sale.
About 203k FHA Loans
With the help of a 203k loan, you can renovate your dream home and wrap all of the renovation costs into your West Knoxville home loan. The amount you borrow for the loan is dependent on the sales price of the home and the estimated cost of repairs. Your down payment of the home is as little of 3.5% and the seller can even pay your closing costs. Depending on the type of repairs you do, you can expect your monthly payment to be a bit higher. Luckily, though, after a year or two, you can refinance out of the 203k loan.
Types of 203k Loans
The first type of 203k loan that an be used to repair a West Knoxville home for sale is a streamlined 203k. Streamlined 203k loans are capped at $35,000 worth of repairs and cannot involve structural repairs. There is no minimum amount for repairs.
The second type of 203k loan is a traditional 203k. It must require up to $5,000 worth of repairs and is used for any type of structural repair.
With both loans, repairs must start within 30 days of closing and must be done within 6 months.
Examples of Repairs That Can Be Done
A 203k loan can be used on any traditional sale, foreclosure, or pre-foreclosure sale, so long as the property qualifies for FHA financing.
Here are just some of the repairs that can be done to a West Knoxville home with a 203k loan:
-Replace major systems heating, air, cooling-Improve thermal efficiency by weather stripping windows, caulking and sealing openings, etc.
-Replace roof, gutters
-Remodeling kitchen with new appliances
-Replace flooring and carpet
-Accessibility improvements for people with disabilities
-Fixing structural damage
If you’re thinking about using a 203k loan to buy a West Knoxville, be sure to do your research on a loan officer with experience with these loans. Not every lender does these on a regular basis, which can cause delays in closing if there not handle properly.
Are you thinking about buying a West Knoxville home this year? If there is anyway Knoxville Home Team can assist you, please let us know, you can give Rick at call at 865-696-9002 or send an email to [email protected]. Kati can be contacted at 865-392-5880 or via email at [email protected]. Also, be sure to check out our West Knoxville Home Search Page to see what homes are for sale in the West Knoxville area.
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