what do you know about 203k mortgages?

how do they dole out the dinero for the repairs? do I do it, or does the bank? how do i submit the estimates for the work?

(this is an FHA mortgage that allows you take more than you buy the house for to do necessary repairs)

Message edited 10/4/2009 5:02:52 PM.

Re: what do you know about 203k mortgages?

You need to have an estimate prepared that includes all work to be done. When you close repair money is put into a seperate account held by the bank. I believe that the bank directly releases the money for the repairs as they are completed holding back 10% until the final inspection when they make sure everything is completed.

Re: what do you know about 203k mortgages?

What if you need to replace sheetrock b/c they painted over the wallpaper (UGH) and when pulling off wallpaper, the walls were destroyed.

is this considered a repair that can be included in my estimate?

i am worried that what the bank deems as "liveable" is not liveable for us. do they even care?

the only thing i found online is "this loan is not intended for "luxury" items"... which i take to mean top of the line appliances.

THANKS SO MUCH!

Re: what do you know about 203k mortgages?

we were considering it for a major home reno that we are doing.

You would have to hire a Hud certified inspector who would authorize the disbursement of the funds after inspecting that the work was done or at the next milestone to continue.

In our case the loan would have paid our current mortgage plus the repairs. The closing costs were insanely high!!!

Re: what do you know about 203k mortgages?

Oh no! closing costs are high? i wonder what makes them so much higher?

Re: what do you know about 203k mortgages?

I'm not an expert on this so your loan might be a different type...are you mortaging just the repairs? I believe if it's under $30k or so than that might be different.

For us we were doing our entire mortgage. All FHA loans require that you put down 1.75% of the loan value as an up-front insurance cost. Then you pay a minimum 5 years of PMI no matter how much equity you have in the home. Crazy! But right now it's one of the only ways to get loans to do repairs/renovations when the equity in the house won't cover it.