Wife and I are looking at homes, and we found a diamond in the rough, we are looking at 203(k) loans due to the size of the amount of work to be done (Full kitchen, 4 baths, move walls, flooring, appliances, etc). Anyone ever use one, experiences, and lessons learned?
no specific experience with those type loans but I would pay the money upfront for "due diligence" on the property from the best home inspector you can find. This way you can figure an accurate budget to base the loan on. We just finished a "small" bathroom job that ended up triple the original quote. Customer wanted "lipstick on a pig" work. After the demo... all the little things started to add up she had a change of heart.
^ The basis of a 203 requires a contract, home inspection, and a full quoted list of work from a qualified GC, before the loan goes through. We are working all aspects of that to minimize surprises. We are walking though with a GC, and use their recommended inspector. The goal is to make this a forever home. (Bonus, its only 30 min to Summit Point)
My Aunt bought a house using one of those about 25 years ago. No issues with the loan, but the contractor was shitty and used below builder grade stuff where he could (cabinets, doors, etc). As long as your guy doesnt screw you over on quality they seem like a good deal. enjoy the house.
I used a 203 when I bought my house 6+ years ago. I found a contractor to work with me outside of how its supposed to work. I took out $17k above the purchase price and did almost all the work myself. In exchange for hiring him to install my hardwood floors(that was a big mistake), he agreed to sign over the balance of the money to me so I could put it towards materials.
