An introduction to 203K Loans, the “Renovation Loan”

203K loans have been around for years, but they are becoming a focus for banks and are increasingly popular for borrowers. 203K loans are known as “Renovation Loans” and are a great option for anyone who wants work done on a house right away, especially those purchasing neglected foreclosures and short sales. Homeowners who want home improvement work done can refinance with a 203K loan and roll the money for the improvements into the loan. Interest rates for the 203K programs are surprisingly lower than you may think and, in some cases, buyers and homeowners can borrow up to 110% of the new value (after improvements). For example, if the current appraised value of a house is worth $200k and the appraised value after adding a dream kitchen and flooring increases the value to $250k; then qualified borrowers can borrow up to $275k on the property, whether it’s a purchase or refinance. Not bad right? Read more