01-10-2011 06:07 AM
1. How is the amount of money available for renovations determined?
2. Can I gift down payment money to my wife if she is the only one applying for the mortgage?
3. Would I need to provide verification of where the gifted funds came from?
Thanks for the help!
01-10-2011 02:06 PM
Larry, you're confusing me...I thought you were non 203k (although I love the program)
Renovations work off the budget. They are easy. 203k has two flavors---streamlined and full. The difference is "$35k" max on streamline, but that really means probably $29-30k in work to leave appropriate contingencies.
For 2/3, why? I thought you were anchoring the DTI per the other posts? Either way, DTI/asset questions for married couples are the same from every state, but the answer depends if you're in a community property state...where are you again?
01-11-2011 09:34 AM
The amount you are allowed to borrow is determined by the as completed appraisal
The appraiser needs to know what work will be done and then they will estimate the value based on current market with the work donw
You can then borrow up to 96.5% of that
You cannot gift to your wife to avoid showing where the money came from
These days when a gift is given the person gioving the gift is almost always asked to provide a bank statement to show that the money didnt just show up magically
they would be even more suspicous if it were to come from a spouse
Thats not saying you cannot give her the money but in the eyes of the lender what is yours is hers
so be prepared to source the funds
01-11-2011 11:19 AM
I do not think the property I'm looking at would go regular FHA because of the amount of work needed. Therefore I am now looking to go with a streamline 203K. I do not live in a community property state...
01-11-2011 11:34 AM
Very good primers about the FHA 203k loan:
Here is the worksheet that any lender will be using to determine the maximum dollar amount for the repair/rehab work:
If your agent is good, they'll be able to go through the home and recognize items that would prevent the home from meeting FHA property requirements. If you'd like to research on your own, you can find HUD's minimum property requirements (for existing homes) at http://www.hud.gov/offices/adm/hudclips/handbooks/
You can also ask/pay for a FHA inspector or 203k inspector to come out to the home.
01-14-2011 10:34 AM
We are in the tail end of our renovoation, completed and waiting for everything to be finalized. it wasn't as bad as I thought it was going to be, (at least the 203k paperwork process, the contractor side of things was a nightmare)
After you close, a week later you can get up to 50% upfront if streamlined if the contractor has a need. The check is overnighted.
If you go that route, DON'T do what we did. We gave him the whole 50% upfront and his irresponbility with handling of that 50% caused a 1 month job to turn into 4 months and him claiming his didn't have funds. (The bank in our case, Wells Fargo will not approve additional draws past 2.) Make a joint account between you and the contractor, allow draws from that account per specific portion of the renovation. The interest rate was slightly higher (5.15% for us).
We did our homework, checked his references and everything and still had a bad experience.
Would we do it again? Absolulately! Our house was a shortsale and it looks so much better. Ours needed some repairs and our wish list were hardwood floors for 4 rooms and tile in the kitchen. Plus all brand new appliances.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.