Tell me what’s going on in the market in general:
- Rates are down
- Inventory is tight
- Inventory is the tightest in the affordable housing segments
- Renovation mortgages are a huge tool for those wanting to broaden their search
Tell us about renovation mortgages, I know that’s your specialty…
- 1 loan for purchase and for repairs/renovations
- Great for needs AND wants
- Work is done after closing
- Appraisal is based on “as improved”
- Several types:
o FHA 203k – great for 1st time home buyers. Owner occupied only. 1-4 units. Can use DPA. Generous seller concessions. Can pair with $100 Down program on HUD REO properties. Caps out around $315K loan amount.
o FNMA Homestyle – owner occupied and 2nd homes and investment properties. 1-4 units for owner occupied. Can do “luxury items” like a pool. Can go to higher loan amounts up to $484,350.
o VA – must be a qualified veteran with VA entitlement (mention Bluewater Bill), owner occupied, 1-4 units, 0% down, generous seller concessions.
What should a customer consider when shopping for a renovation mortgage and can these be done asa refinance as well?
- Experience #1 and products #2
- Don’t be the person who is getting practiced on with these products. I have done over 600 of them and would not consider myself to have been a real master of them until I had done about 100.
- “If you are a hammer, every problem looks like a nail”… if your lender does not have all these products then they are looking at putting you in what they have available versus putting you in what fits you best.
- These are awesome for refinance opportunities
o Tight equity scenarios
o Better than high interest credit cards
o Avoid dipping into savings or retirement
o Go to higher LTV’s and go off “as improved” values
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