If you want to purchase a home that needs to be fully or partially renovated or you want to make some improvements to your current home, it may be a good idea to apply for a FHA 203(k) loan. This type of loan can make purchasing or renovating your house considerably easier. Previously, you would have had to apply for several loans in order to finance the remodeling of your home, but the 203(k) loan is a collection of loans that will assist you in paying for the services and supplies that are needed to make your home look its best.
Currently, about one to four family homes that are used solely for residential purposes are eligible for the 203(k) loan. So, what are the requirements for being approved for this type of loan? Does your credit score have to fall within a certain range? How much cash do you need to have already saved? Can you get the loan if you’re a first-time homebuyer? Here are some answers to these questions that will help you prepare if you’re applying for a 203(k) home loan.
Your credit score will be a factor, and it’s easier for you to get approved for a loan that is backed by FHA if you’re already a homeowner. If your FICO score is a minimum of 620 and you have a down payment of 3.5%, you’ll likely qualify for the 203(k) loan. If you have a FICO score that is below 620, you’ll have to meet some additional requirements.
If you’ve never purchased a home before or haven’t been a homeowner in the past three years, you’re considered a first-time homebuyer. There are several loan options available to you, including the 203(k) program. This is a wonderful financing option if you’re new to the home purchasing process, but it’s also a smart choice if you currently live in or plan to live in the home you want to renovate.
FHA loans are available to everyone, but they’re often considered a program for first-time homebuyers for several reasons. Generally, those who are purchasing a home for the first time don’t have a large amount of money for a down payment, and FHA loans only require that you have 3.5% for your down payment. If you’re a homebuyer with a lower credit score, you may not be able to get approved for other types of home loans.
First Fidelis can help you choose the 203(k) loan that is just right for your budget and home renovation needs. Whether your home needs upgrades or repairs or you have to make detailed changes to the structure or foundation of the home, First Fidelis is here to help. Our qualified team is available to answer your questions and help you go over the requirements that you need to meet for the loan you need. We’ll also show you the difference between the 203(k) loan and a standard FHA loan, so you can plan your home purchase and renovations accordingly. Contact First Fidelis today for more information.