There is an issue with using an FHA loan on a fixer, there are specific types of “fixer FHA loans” but there are not very many banks performing on those loans.
So, what is the answer? What about a 5% conventional Loan. I even heard yesterday from one of our Lender Sources about a 2% Conventional Loan. The 2% is harder to get due to the same issues with the FHA fixer loans, there are not that many banks funding them.
However, the 5% is pretty neat. You can have a conventional appraiser, you can also pay 2 points upfront and strike PMI, Property Mortgage Insurance, for the remaining life of your mortgage, and they will work on a Foreclosure that might need some minor fixing.
FHA appraisers will mandate, a property, that they are reconning(appraising), has a few basic attributes; They want it to be very close to move in condition. They want the carpet that is in place to be habitable. They want the paint to be in good repair. Not to mention the appliances to be present and in working condition, plumbing functional and more. If the property does not meet the FHA apprasial guidelines, the seller (owner) has the choice to bring it to that level, have a re-inspection, or trash the deal.
Conventional Loans are more attractive to most sellers with properties that do not conform with FHA Guidelines.
Therefore – our Buyers were elated to see that there is a Conventional loan that can be obtained for as little as a 5% down payment. Most conventional loans were at the 20% down-payment amount – this might help a lot of buyers get what they want.
Buyers might have to save a little more money, from 3.5% to 5%, but with that determination and discipline, they might find it easier to get their offer accepted when it comes to the Offering Review Period on a Bank Owned Property.
Looking to Re-finance your home, condo or town-home – just notate that in the Comment section below and we will hunt a Re-Finance Lender that will serve you well.
Let us find you a Lender that will be able to help you and as always, be Safe…
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