Home Improvement Loans Flashcards
FHA 203K Loan
A loan insured by the FHA. Provides you with an initial loan for purchasing a home as well as funding an improvement.
What loan type should you get if:
You plan to purchase a home that needs major repairs?
FHA 203K Loan
What is a HELOC?
Home Equity Line of Credit:
A line of credit from which you can borrow at any time during the draw period, up to your credit limit. Typically, the draw period is 10 years, and repayment period lasts 15 years.
How do you know a HELOC might be right for you?
If your home improvement plan consists of multiple expenses that may be paid over time and you don’t have funds available for significant closing costs.
What is a Home Equity Loan?
A home equity loan provides a lump sum of money. It is often referred to as a second mortgage.
How do you know if a Home Equity Loan is right for you?
If your home improvement plan consists of a large one-time expense. If you want a fixed rate for your monthly payments. If you do not have funds available for significant closing costs.
What is an Energy Efficient Mortgage?
Assists individuals to purchase an energy efficient home or refinance a home to make energy efficient improvements.
Does the borrower need to qualify for additional financing or provide a higher down payment for EEMs?
No
What is a Title 1 Loan?
Insured by the FHA, may be used for alterations, repairs, and site improvements on single family homes and for alterations and repairs on multifamily homes.
How do you know if a Title 1 Loan is right for you?
If you are the owner of a property to be improved, the person leasing the property, or someone purchasing the property under a land installment contract. If you want a fixed interest rate and desire a loan of up to $25,000 for improving a single-family home.
What is a Streamlined 203K?
Permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home.
How do you know if a Streamlined 203K is right for you?
If you would like to carry out a minor rehabilitation and/or improvement project that will not require the involvement of consultants, engineers, and/or architects. If you can complete the project within 6 mo.
A refinance may be right for you if:
1: Your original mortgage interest rates are higher than current loan rates and will lead to a large reduction in monthly payments.
2: You are required to pay for mortgage insurance on the original loan and owe less than 80% of the home’s value.
3: You would prefer to switch from an adjustable-rate loan to a fixed-rate loan.
What fees are associated with refinancing?
Closing costs, (maybe) appraisal costs, loan fees, etc.
