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Listing all posts with label homestyle renovation loan. Show all posts.
  1. I hear people asking me all the time "why should we use a 203k or HomeStyle Renovation Mortgage over a standard construction loan? I received an email today and this is what it had for their construction loan

    RATES AND FEES
    • 7 to 14% to Borrower
    • Servicing Fee: 1%
    • Broker Points: Starts at 3.0
    • Referral Fees: 2 Points Maximum
    Look at that high interest rate versus the FHA and FNMA products which are currently between 4-4.5% typically. Servicing fee, what is that? How about the Broker points which quite often are "ZERO" with FHA. Plus 2 points referral fee. That in a nutshell is 7-14% interest for the borrower and 6 points up front. Not even close for our "borrower friendly" loans. If you are an investor,you should use the HomeStyle Renovation Mortgage and get a 30-year fixed rate that you are not under the gun to refinance while you look for your buyer to clear you out.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


  2. Contractors typically are used to getting 10% down at the signing of their contract, and another 30% when materials are landed at the sight. That hasn't been the case with a Standard 203k where they must work soley on their own credit and cash to get started then get "reimbursed" for each phase to get their money back.
    The "Limited 203k" loans, per the guiedline always provided 50% of the project cost for materials  up front to the contractor unless you were dealing with a lender like Wells Fargo that only allowed 35% or Prospect Mortgage at 40%. Most other lenders still provide the full 50% per the guideline. Years ago I would see B of A, close the loan and in many cases it took them up to six weeks to provide the "50% up front money". These "limited 203k" project were quite often only going to take 30 days to six weeks to complete. They finally got with the program (years ago) and started providing the money from escrow at closing.

    The new rule as it is proposed for

    Standard 203(k) transactions, Mortgagees may disburse the following at closing:

    • permit fees (the permit must be obtained before work commences [to be reimbursed at closing]);
    • prepaid architectural or engineering fees;
    • prepaid Consultant fees; [reimbursed to the borrower] [This can be added to your escrow instructions to be used as part of their down payment or closing costs too]
    • materials costs for items, prepaid by the Borrower in cash or by the contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date; and
    • up to 50 percent of materials costs for items, not yet paid for by the borrower or contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date
    • For any Disbursements paid to the contractor, the Mortgagee must hold back 10 percent of the draw request in the Contingency Reserve.
    This is actually a big thing. This will allow us to get reimbursed for materials... materials at 50% of their cost at the close of escrow. By paying that directly to the supplier with proper 1099 form and invoice copy for materials they can get the money at close of escrow. This should speed things up considerably for getting the big ticket items deposits paid for up front at the closing. 
    While the permits and some of the other fees has been the case for yers the 50% of some of the materials costs paid at close is going to help allow more contractors the flexibility to do more 203k projects. Technically this goes into effect Sept 14th, 2015 but many lenders are going with it right now.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


  3. What does a typical 203k project look like? Here are a few that we saw in the past year... 

     San Jose. Needed a new roof, heating system was well beyond it's useful life. Vegitation growing all over the home... clinging vines, dated kitchen and bathrooms. Seller ignored repairs for years thus a lower than typical sales price would be in order.

    Duplex northease of Davis. Lack of typical maintenace over a long period of time caused damage to wood members that might have been avoided with normal owner preventive mainteance. Seller should eat the loss here as this never should have gotten this bad.

    Typical 203k project 3SFR in Vallejo. This cute home just need some updating and weatherization.

    Typical 203k project 4SFR in SF had an illegal lower level unit. Someone convered the basement to a second living area but forgot to obtain permits and then failed to use common construction methods. Seller should carry the brunt of the cost in a lower sales price. 

    Pretty much anything is a typical FHA 203k renovation potenial property. If you are trying to sell a home with a bad roof or a marginal roof and it leaks just after the home is sold, you will likely get sued... not if you had suggested a 203k to replace that faulty roof as it would be a warrantee item. 

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


  4. This one gets me all the time. You forgot the case number, here it is please insert it on each page of the report. I'm surprised you forgot it with as many of these as you have done.

    LMAO, the case number is ordered after our report is completed and turned in. It is ordered when the order the appraisal, they can't order the appraisal till they know the cost of the repairs. It is a "catch 22" for sure. There isn't a week that goes by that we don't get asked to provide the case number on all the forms. It is actually a pretty simple thing to do with our proprietary software. We merely add the case number and reprint the report with a push of a button then send that pdf to the client and their lender. 

    If you are a 203k or a HomeStyle® Renovation Mortgage lender and would like to try our software for FREE to kick the tires please request it and we are happy to provide it to you. It is actually an asset to many who only do the streamlined k, soon to be renamed "Limited 203k". Our software output was voted "easiest to underwrite" by a 98% margin over our competition. If you haven't tried it ask for a free trial. If your consultants reports are adding correctly or are just leaving too much work for you.. give ours a try. 
    Mike Young, 203k Team Leader    Mike ready for your 203k order
    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages. Got a 203k project giving you "fits" contact us at www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process.
    Skype name: the203kconsultant
    t_logo-a.png Facebook You Tube 203konline.com MY 203k Team bug

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