Home Repair Escrows
How do I buy a home that has repair issues or things that need to be repaired before I can get financing?
At Icon Mortgage and Matt Keway at mattkeway.com you can get approved for a home mortgage for a home that may have appraisal or inspection issues that cover roof damage, peeling paint, heating/cooling missing unit that will restrict you from getting a loan from banks and credit unions.
Below I will educate you on home repair escrows and the ways you can purchase your home and finance or escrow the repairs AFTER you purchase the home.
Rural Development loans: This loan is a 100% financing product, here is the website link to check out if the property you are looking at is in the Rural Development map https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do here you can see the eligibility areas and if there are repairs needed for the home you are considering purchasing or selling than if your home is in this area then I can help with the loan and if there are repairs needed then we can structure the loan to include the repairs as long as the property appraises above the value of the purchase price and we can include the improvements. If you want to sell your home AS IS then I can facilitate having the buyer make the improvements after closing or as a seller you can gift the money from cash from proceeds to take care of the improvements.
FHA, Conventional Home Mortgage Loans:
If you are purchasing a home with an FHA loan vs Conventional loan then you should contact me ASAP because there is no reason you should be getting an FHA loan which has PMI FOREVER, you can get a Conventional loan for as little down as 3% vs FHA which is 3.5% and has PMI of .85% for the life of the loan and can never go away unless you refinance, Conventional loans have a lower PMI and you can get rid of the PMI or mortgage insurance when you have20% equity.
Home Repair Escrows FHA, Conventional
If you are looking at purchasing or selling a home with Conventional or FHA financing and the home has issues like a bad roof or missing integral parts like a furnace or hot water heater then you can get your loan closed and finance the repairs after you close your loan.
To do home repair escrows you must first get a quote from a general contractor, this person must be licensed and hopefully insured but not necessary; we only require a business license.
The amount we hold in escrow is going to be 1 and a ½ of the quote so if your repairs are quoted out at $5,000 for example then we will need to hold $7,500 in escrow to be prepared for things that the contractor didn’t estimate upon the initial quote; after the loan is closed and you own your new home then the contractor comes out and does the work. The contractor then sends the invoice to me and I pay the contractor and any money left it sent back to you the home buyer.
If you have found your dream home but it needs a little work to make It financeable and banks and credit unions are not approving your property, give me a call at 810-223-2122 and I will help you.
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