203k Loans – WOW Look at these great deals!!

203k loans tip the scale

Okay so I’ve blogged about the 203k loan before, these blogs have included posts providing an overview of 203k loans (see “A Spot Light On The 203-k Rehab Loan”) and what the consumer can expect as they go through the process (see “Explaining the 203-k Process”).

Well that’s great you say….you feel educated, but now let me give you some examples of real life closings and show you the true power of this loan:

Borrower 1: (Purchase – City of Chicago)

This borrower purchased the property as an REO and did a full 203k loan with a plan review.

Purchase Price: 75K
Repairs: Approx 25K
Loan Amount: Approx 95K
Appraised Value: 135K with repairs.

EQUITY POSITION: 70.3% Loan to Value

Borrower 2: (Refinance – City of Chicago)

Purchase Price: 27.5K
Repairs: Approx 100K
Loan Amount: 118K
Appraised Value: 165K with repairs.

EQUITY POSITION: 71.5% Loan to Value

With the above two examples the borrower(s) now have the possibility of doing a refinance and moving into a conventional loan.  This will allow a further savings by removing the monthly mortgage insurance premium.

All this with a 3.5% down payment!!!!

Now tell me that this isn’t a great loan for this market. Buy a distressed property, clean it up, make it YOUR home the way YOU want it and get instant equity!!