The North Valley Team of Phoenix Arizona

Understanding the FHA 203(k) as a Tool for Buying or Refinancing a Home

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The FHA 203(k) loan in Arizona enables qualified borrowers to purchase a Phoenix home that may need repairs or to refinance an existing home for the purpose of remodeling. You can borrow monies to purchase the real estate and make the repairs and upgrades with only one set of paperwork and one set of closing costs!

With the FHA 203k Phoenix home loan, a phoenix home buyer can purchase a home and have it repaired or remodeled with the same low interest FHA loan.These loans are especially great for FHA properties, older homes and REO homes — but any home can benefit from some remodeling or cosmetic fixes, to make it your own.

With FHA 203(k) rehabilitation lending, you have a convenient alternative to a second mortgage or HELOC for repairs, renovations and improvements. The loan amount is based on the as-completed value of the home, rather than the present value.

The benefits of an FHA 203(k) include:

  • Purchase and refinance on 1- to 4-unit primary residences
  • One underwriting review and one closing for rehabilitation construction and permanent financing saves you time and money
  • Loan based on after-improvement value of the home
  • Down payments as low as 3.5%
  • Family members may pay all of the borrower’s required down payment, closing costs, prepaid expenses and discount points.

Even if you don’t have a lot of cash at hand, you may still be able to qualify for a 203(k) because of the allowance for family members to contribute funds.

There are two primary types of 203(k) loans: the Streamline Renovation loan and the Standard Renovation loan. Below are details on both:

Streamline Renovation Loan

Program Benefits:

  • Total rehabilitation costs up to $35,000
  • No HUD Consultation necessary
  • No contractor approval necessary

Some examples of allowed renovations are:

  • New roof
  • Minor remodel of kitchen or bath
  • New HVAC
  • Upgrade electrical or plumbing systems
  • New carpet or paint
  • Install hardwood floors
  • Purchase of new appliances
  • Repair insect or weather damage
  • Replace windows
  • Finish basement

Standard Renovation Loan

Program Benefits:

  • No limit on repair amount; $5,000 minimum
  • Inspection fees for up to five draws are included in loan amount
  • Single-family homes, PUDs and 2-4 unit primary residences are eligible
  • HUD Cost Consultant fee may be rolled into the mortgage
  • Mortgage payments for up to six months may be included if the property is not habitable during renovation

Some examples of allowed renovations are:

  • New roof
  • Remodel kitchen or bath
  • Room addition
  • Structural alterations or reconstruction
  • New HVAC
  • Upgrade electrical or plumbing systems
  • New carpet or paint
  • Improve landscaping
  • Install hardwood floors
  • Purchase and installation of new appliances
  • Repair or replacement of structural damage
  • Replace windows
  • Finish basement
  • Energy conservation improvements
  • Major landscape work and site improvement

Use the 203(k) to turn a good home into a great home. We’d love to discuss this program with you in more detail. Please contact us today to learn more about the 203(k) home renovation loan and whether it’s the right choice for you!

Can I do a Short Sale if I have a VA Loan?

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In Phoenix there seems to be alot of confusion for home owners with VA loans as to whether or not they can do a short sale. The answer is yes. I just recently assisted two homeowners, with VA loans, in the Greater Phoenix area, complete short sales. Those home owners have now avoided foreclosure and they should be able to buy a home again in two years if they rebuild their credit during those two years.

Our expert real estate agents and brokers can help you with your VA loan short sale in Greater Phoenix Arizona.

I believe part of the confusion lies in the VA guarantee; home owners think they have to pay that money back. In most cases the money does not have to be paid back; it is forgiven through the VA short sale process. However, a VA eligible borrower will not be able to use their VA eligibility to buy another home until any deficiency is paid back. But, there is nothing stopping that borrower from getting an FHA or conventional loan for the purchase of real estate after the two year period, providing the buyer has effectively rebuilt his or her credit.

A homeowner does need to prove a valid hardship, and a military transfer or deployment is a valid hardship if your home is worth less than what you owe on it and as a result, you cannot sell.

The best thing to do is simply give me a call and we will discuss your lending structure, hardship and home value, and then call your loan servicer to confirm required paperwork and eligibility for a short sale. You must ALWAYS be aware of ALL your options before committing to a strategy.

FHA Loan Financing….Did you know?

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Are you aware of these FHA loan financing benefits? If not, you should read this before you buy your next Phoenix Arizona home.

I was speaking with a tenant that was living in a home that one of my clients just purchased in Glendale. She had expressed to me that she wished she could purchase a home and specifically the home they were renting. She told me that she thought her credit score was over 700 but didn’t think she could get a loan because of job history and no large down payment.

The 360 Real Estate team handles FHA home purchases in Phoenix and Scottsdale Arizona.

I let her know that FHA loan financing allows a person to go to school for one year and have it count as job history. This person had worked before she went to school and already had job offers for when she graduated. So she won’t have job history issues. I also reminder her that FHA only required 3.5% down payment and closing costs could be rolled into loan. On a $100,000 purchase that is only $3,500 down and with rates where they are at, they payment would be about $400 less that their rent payment.

There is still other factors to consider, but the moral of this story is that I realized how many people operate off of a lack of information or bad information. I speak to so many people who believe you need 20% down to buy a home these days. I realize that as real estate professionals, we have to continue to reach out and educate so those who desire home ownership truly know what their options are.

Facts Regarding VA Financing – Zero Down Option

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If you are a Veteran eligible for a VA loan, now would be a great time to use your VA loan benefits and buy a home, given the low interest rates on home mortgages. If you are not sure about your eligibility, visit the Department of Veteran Affairs VA home loan eligibility page. Many lenders are VA endorsed and can process your VA home loan very easily. We are also happy to provide a list of Phoenix Arizona VA endorsed lenders should you require assistance.

VA home loan program eligibility for a zero down payment loan on a Phoenix Arizona home.

Here are some of the other benefits of getting a VA loan:

1. VA loans include 100% financing with zero down payment required.
2. VA loan limits are $417,000 which can basically get you into an estate sized home in this current Phoenix Arizona real estate market!
3. There is no monthly mortgage insurance on a VA loan so your payments comparatively, will be lower.
4. Buyers can get up to 4% in closing costs covered by the home seller. Some VA fees (like escrow fees and lender processing fees) cannot be paid for by the buyer in a VA home loan transaction.
5. Rates are competitive because the VA home loans are guaranteed by the government; there is much less risk for the banks.
6. No pre-payment penalties if you pay off loan early.

These are only a few of the reasons why you may want to use your VA eligibility now when Phoenix Arizona homes prices and mortgage rates are so low.

You’re a United States Veteran – you deserve this home buying opportunity!

CONTACT

inVIVO realty Arizona Real Estate
16211 N Scottsdale Rd, Ste A6A-289
Scottsdale, AZ 85254

+1 (480) 788-6473
info(at)arizona.invivorealty.com
www.inVIVOrealty.com