FHA 203K Loan

It’s Saturday, and you are checking up on the latest “Honey Do…” list and things seem to be amiss. You see things like, “Renovate kitchen, expand garage into sunroom, remove and replace old carpeting, rewire house...” All these things seem way out of your league both financially and skillfully. How are you ever going to be able to complete all these renovations and repairs?

Fear not! The FHA 203K loan may be the solution to your worries. The FHA 203K Rehab and Renovation Loan can be used in one of 3 ways:

1. To purchase an existing home (and the land attached to that home) to renovate it.
2. To payoff existing debt on a current residence and renovate it
3. To purchase an existing home with the intent to move it to a new piece of land in a more preferred location.

To put it simply, the only things that FHA and HUD generally frown upon are non-permanent additions to the property and luxury items that are being installed. However, there are several things you might not think qualify for the 203K loan but in fact do:

1. New freestanding appliances
2. Upgrading HVAC
3. Adding energy efficient improvements
4. Wells and septic repair and upgrades
5. New siding
6. Interior painting
7. Exterior painting
8. Finishing the basement
9. Bedroom additions
10. New deck / patios
11. New hardwood flooring
12. New doors and windows
13. Upgrading plumbing and electrical
14. Opening up the floorplan
15. New granite countertops
16. Vaulting the ceilings
17. Making a house handicap accessible
18. Getting a condo or house ready for a new college student
19. Solar panels
20. Low flow toilets and shower heads

Any of these things sound interesting to you? Give your local mortgage professionals a call at First Option Mortgage and find out what brand new things you can do to your home!

15 Year Mortgage

15 year mortgage loans are becoming a little more common. Once, 30 year loans were common and the 15 year mortgage was all but unheard of. A 15 year mortgage allows you to own your home in half the time of a 30 year loan, in full, and can provide you significant savings in the future. There are also 10 year and 20 year terms available.

 How does a 15 year mortgage help me save?

Interest on any mortgage is accrued over the life of the loan. By having half as many months for the interest to accrue, you pay less interest over the life of your mortgage. You can save thousands of dollars instead of it going to the bank.

Some advantages you might want to know if considering a 15 year mortgage loan.

Your payoff date is 15 years sooner than with a 30 year mortgage payoff. The second is the interest savings mentioned above.

The third advantage to the 15 year home loan plan is that people can feel more comfortable knowing that their loan will be paid off sooner so they can retire earlier. If you are in your 40’s and buying a home, a 30 year mortgage might not make as much sense since you will more than likely stop working prior to your mortgage being paid in full.

With a 15 year life span mortgage, the payments will end while you are still earning money, which lenders will assess as a positive when reviewing your loan file, and therefore might be more willing to approve the mortgage.

Are there any drawbacks to the 15 year mortgage loan?

Of course there are. Every situation has two sides.

The main disadvantage is that the monthly mortgage payments will be slightly higher on 15 year loans than 30 year loans. If your financial situation allows you to qualify for a 15 year mortgage, and your income is stable and secure, you should inquire about a 15 year mortgage. You will save more over time.

If you are young and can afford a 15 year mortgage, you can have your home paid off in. If you buy your home as a young couple, having your home paid for in full within 15 years allows you time to save money to help your children meet college finances. If you are older and buying a home on a 15 year mortgage, you can pay the home off and save money toward retirement. It can be hard to save for other expenses while paying monthly house payments.