Many Boca Raton home buyers with mortgages find that the homes that fit into their price ranges have a few problems. For example, they need to have the bathrooms redone. Or the tile flooring is cracked and must be replaced. Most Boca buyers would walk away in discouragement, because they do not have the extra funds to make these repairs after they make their purchase. However, if you want a more constructive purchase there is an loan backed by the Federal Housing Administration (FHA) called the 203K, that can help to alleviate this difficulty.
This useful loan, relatively unknown Most buyers in Boca Raton are unaware of these loans, according to Preston Ware, a Palm Beach County mortgage banker who helps clients to obtain them on a regular basis. Across the U.S, more than 21,000 home of these loans were written last year. Not only can the 203K help new Boca Raton home owners, it can also be used by homeowners whose insurance might not fully cover the cost of repairs due to hurricane damage.
Although banks typically do not lend against a home that has damage, a 203K loan is based on the value of the house after the repairs or improvements are made. Having worked with buyers who needed a 203K loan to purchase a new home, I can attest that a 203K takes longer than a standard home loan because there is far more paperwork involved. Whereas a standard mortgage loan for a home in Boca Raton may take from 30-40 days, expect your 203K to drag on for at least another 20, with a few bumps in the road along the way. The bumps are standard; they are just the bank’s way to checking and double checking to make sure that every item on the extensive check list is covered: for example, if there is a legitimate estimate from a licensed contractor. 203K pays a contractor in stages
After the 203K loan is granted, the contractor is paid in stages; but not until the consultant from the Department of Housing and Urban Development (HID) inspects the contractor’s work. For homeowners, who may be wary of the construction process, 203K procedures provide a large measure of oversight over work and payments. While there are many contractors who are uncomfortable this kind of payment schedule, there are sufficient numbers of contractors who have some experience with the 203K system and will be pleased to work with you.