Profile picture for Troy Betsinger

Troy Betsinger

Lender

Mortgage Banker/HomePath Specialist, Texas (27 years experience)

Specialties:
Purchase Loan,
Refinancing,
Home Equity

Advice

  • (22 Contributions,
  • 0 Best Answers,
  • 12 Helpful)

Contributions are sorted newest to oldest.

Renovation Loan

Response

The best program out there for what you are needing is the HomeStlyes Renovation Loan.  This loan allows for up to $150,000 in renovations or 50% of the improved value of the home whichever is less.  The appraisal will be based on an as completed value and condition.  The renovations must be attached to the home and provide value.   

  (0)
HomePath Renovation Loan?

Answer

The buyer negotiates the sales price. After contract acceptance they obtain a bid from a General Contractor. The amount of the bid plus fees and contingencies are added to the sales price. The down payment is based off of that total. The bid is provided to an appraiser. The appraiser appraises the property as if the work in the bid had been completed. Once the appraisal comes back the loan is submitted for approval. After approval the loan goes to closing. At closing the amount of the bid plus contingency is held back at the bank in an escrow account. The General Contractor has a predetermined amount of time after closing to complete the project. As he completes the work he requests a payment. Each "draw" requires an inspection before payment is made. Once the project is complete the appraiser makes a final inspection and the final draw is paid to the General Contractor. Any money left in the escrow account is applied to the loan balance. The borrower will pay any shortage. [website deleted by Zillow moderator] Troy Betsinger NMLS# 462358 PrimeLending. [phone number deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]

  (0)
HomePath Renovation Loans - Experiences

Response

The buyer negotiates the sales price. After contract acceptance they obtain a bid from a General Contractor. The amount of the bid plus fees and contingencies are added to the sales price. The down payment is based off of that total. The bid is provided to an appraiser. The appraiser appraises the property as if the work in the bid had been completed. Once the appraisal comes back the loan is submitted for approval. After approval the loan goes to closing. At closing the amount of the bid plus contingency is held back at the bank in an escrow account. The General Contractor has a predetermined amount of time after closing to complete the project. As he completes the work he requests a payment. Each "draw" requires an inspection before payment is made. Once the project is complete the appraiser makes a final inspection and the final draw is paid to the General Contractor. Any money left in the escrow account is applied to the loan balance. The borrower will pay any shortage. [deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]

  (0)
What is HomePath Renovation Mortgage Financing?

Answer

Just a quick response to the comment that the fees for a HomePath Renovation Mortgage are high.  The difference in fees between a standard HomePath and a HomePath Renovation loan at my bank are $1,150.00.  Those renovation fees are financed into the loan.  The interest rate will be slightly higher, but since mortgage insurance is not required the payment should almost always be lower than a standard conventional or FHA mortgage.  

  (0)
HomePath Renovation Loan?

Answer

The answer to your question is complicated.  I will do my best to simplify it. All mortgages are sold into pools.  These pools have a set rate determined by the source of funds. For instance when you buy a bond with a guaranteed rate of 2% that is a source of funds.  The bond holder is obligated to pay you 2% and will pool those bond funds and add a  profit margin.  Let's say 1%.  They will then lend out that money to mortgage banks at 3%.  This is a wholesale price.  When you apply for a mortgage the bank will lend out money at a retail price.  Lets say 4.50%.  The 1.5% difference is what they need to make a profit.  This is called the yield and would not require discount points.Let's say rates rise rapidly and now bonds are selling at 3.5% and the wholesale price is now 4.5% and the bank now has to charge 6% to make a profit.  This will cause a problem because all mortgages are sold to to a  pool after closing and nobody is going to want those mortgages at a 4.5% yield.  So the bank will charge the difference between the 4.5% and 6% yield in the form of discount points.  Now you would think that you can just take the higher rate of 6% and avoid the points.  Eventually you will be able to do that, but their is a lag time because it takes awhile for the new bond pool to sell enough bonds to 3.5% buyers.  So essentially they want to exhaust their 2% pool first but when the mortgage is sold to the final investor they want the 6% yield.Rates rose rapidly in June and you probably hit that lag time.Hope this helped

  (0)
What is Homepath Renovation Mortgage financing?

Answer

The buyer negotiates the sales price. After contract acceptance they obtain a bid from a General Contractor. The amount of the bid plus fees and contingencies are added to the sales price. The down payment is based off of that total. The bid is provided to an appraiser. The appraiser appraises the property as if the work in the bid had been completed. Once the appraisal comes back the loan is submitted for approval. After approval the loan goes to closing. At closing the amount of the bid plus contingency is held back at the bank in an escrow account. The General Contractor has a predetermined amount of time after closing to complete the project. As he completes the work he requests a payment. Each "draw" requires an inspection before payment is made. Once the project is complete the appraiser makes a final inspection and the final draw is paid to the General Contractor. Any money left in the escrow account is applied to the loan balance. [deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]

  (0)
What is Homepath Renovation Mortgage financing?

Answer

For an example from contract to closing on how a HomePath Renovation Mortgage works watch my video. [Removed by Zillow Moderator. Please see our Good Neighbor Policy.]

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