Yes, FHA 203(k) loans require mortgage insurance. The Federal Housing Administration (FHA), the government agency insuring this loan, expects all borrowers to pay two types of mortgage insurance premiums.
Hereof, can a first time home buyer get a rehab loan?
FHA 203(k) Rehabilitation mortgages allow first-time homebuyers to take advantage of below-market interest rate loans that cover costs of purchasing and making full or limited renovations to your dream home. This program may also be used to finance abandoned or foreclosed properties.
Correspondingly, can I remove MIP from my FHA loan?
Method #1 to Get Rid of FHA Mortgage Insurance: Check your Loan Balance. You can request the cancellation of your FHA mortgage insurance when you meet certain requirements. You’ve paid your loan for 5 years if you have a 30-year loan. If you have a 15-year loan, there’s no 5-year minimum.
Can you buy furniture with a 203k loan?
Furniture | Accessories | TV
Kitchen appliances – stove, range, refrigerator, built-in microwave oven – those can be included in the loan. In some cases, like that of a stove/range, it may even be required to be included.
The down payment
With a conventional mortgage, as long as you put 20% down, you can avoid paying private mortgage insurance (PMI). … One of the benefits of the 203(k) loan is its low down payment option of 3.5%.
PMI (private mortgage insurance) is required on conventional loans with less than 20 percent down. But the rules are different with FHA. All FHA loans require mortgage insurance premium (MIP), regardless of down payment size.
The good change is that FHA lowered its mortgage insurance premiums in January 2015. On the negative side, they’ve made PMI essentially permanent over the life of most mortgages that they insure.
The FHA 203k loan requirements are similar to that of a standard FHA loan. All borrowers must meet the FHA credit score requirements. The minimum FICO score allowed is 500. All borrowers must have the minimum down payment of 3.5%, or 10% if the FICO score is below 580.
The main difference between PMI and MIP, as we’ve already mentioned, is that PMI applies to conventional loans while MIP applies to FHA loans.
- Only eligible for primary residences.
- Mortgage Insurance Premium (MIP) required (can be rolled into loan)
- Do it yourself work not allowed*
- More paperwork involved as compared to other loan options.
Streamline 203k loan
- Replace or repair existing HVAC systems.
- Replace or repair roofs, including gutters and downspouts.
- Replace or repair plumbing systems.
- Update floor and/or flooring treatments.
- Interior and/or exterior painting.
- Update appliances.
- Waterproof basement.
- Home weatherization.
The major difference between an FHA 203(b) and a 203(k) mortgage loan is that one is intended for homes in need of extensive repair while the other one isn’t.