Re: Rehab Mortgage Loan?
09-29-2012 08:43 AM
I was informed about this during my home buying process as well. The name of the financing is a 203k loan. I don't know how it works with conventional financing, but with FHA financing I was informed they allowed 30k above buying price if approved withinin normal lending guidelines. The tricky part is, the house is reappraised after the rehab is complete(I believe they give you 6 months, someone correct me if I'm wrong). If the house appraises for less than the amount of the loan with the 30k extra, you get to write them a big fat check to cover the difference. So say the house is purchased at 100k, and you take out 130k to rehab it. The house reappraises for 125k, you will then owe the lender 5k. Hope this helps
Starting Score: EQ 619
Current Score: EQ 735, TU 732, EX 745(Lender Pulled)
Goal Score: EQ 700
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