Over the last few years, banks have become the enemy of most home buyers because of the stringent qualifying parameters that have made it all but impossible to obtain financing since the mortgage crisis began. The only people who could qualify for a loan were the very ones who didn’t need it. Credit scores were raised to an unreachable level for the average buyer and the homes in question had to be in perfect condition for the bank to lend on them; no fixer uppers! All of this combined to make it very difficult for the first-time home buyer, anyone with a down payment of less than 20% of the purchase price, or anyone who’s made one late payment on their Macy’s card!
To be perfectly honest, “someone else’s” home is never in perfect condition. I can’t tell you how many times I’ve walked into a house with clients and the first thing the buyer does is start listing everything they would change to fit their idea of “home”. In addition, many homes on Kauai have had “improvements” made to them without the proper permits in place, or are not up to current building codes, the latter of which were particularly scrutinized and avoided by lenders.
Finally there is hope… Wells Fargo Home Mortgage of Hawaii has recently introduced three new loan products which will help resolve the challenges that have prevented the average buyer from purchasing a home. Whether you WANT to fix up or house, or NEED to, here are some options:
1. Easy-to-Own Guaranteed Rural Housing Program: This loan program was designed specifically to increase home ownership in rural areas, like Kauai. This loan offers a No down payment option or down payment assistance. Closing costs may be financed into the loan, and less than perfect credit borrowers welcome.
2. FHA loans – These loans provide flexible credit and income-qualifying guidelines, fixed and adjustable rates, down payments as low as 3.5%, gift funds accepted as down payment and some buyers can take over the existing mortgage of the Seller including their interest rate.
3. Streamline 203(k) – This loan is designed specifically for the home that needs work by providing financing to purchase and repair the home, refinance a home that needs a makeover and you can pay for the remodel gradually over the term of the mortgage. The appraiser takes the upgrades to be made into account, and bases the appraisal on the value of the home once the improvements are completed. At closing, you get the cash to do your improvements!
I don’t know about you, but I’ve made some appointments already! Give me a call today at 808-639-8496 to discuss these loan options in further detail.