Thursday, June 21, 2012

203K Streamline Paperwork & LEAD paint

I finally had a contractor fill out all the documents the bank requires including a bid! 5 pages in total and the bid being about 10 pages. I am not done with this loan process yet, but I am not sure if I can recommend the 203k loan to someone that has other options like a regular FHA or conventional loan. Will touch this topic once everything is done.

The great thing about using the 203k loan is the bank loans you money to bring the property to par ..all in one loan (rehab $ and loan amt). The most difficult part for me was finding a licensed, bonded, and insured contractor who wanted to do the work for the "regular amount" it will cost to rehab a house to the minimum standards.

My initial budget was $18,000 and I had to increase it to $25,000! $25,000 might not seem a lot to others, but it's a lot of money and I'm sure that a non-licensed worker can do so much more with that amount. I'm talking about these non-licensed workers who work for the contractors and get all the work done. Contractors negotiate their fees to the penny with their workers, but maximize their profits when charging the client and play such a double standard game.

I suppose business is business...maximizing profit is the "big picture."

When I sent the bid to my loan officer at Wells Fargo he wanted my contractor to include the specific work he was going to do to get termite wood clearance and to include "EPA standards" when painting.

I talked to my contractor about the "EPA standards" and he went on and on about how that's going to cost a lot because we need to get a certified LEAD company to inspect the property and if lead is found, he would literally need to sand everything down to the original wood and paint that wood. He estimated all of this to cost an additional $3,000!

I called my loan officer and he said that the appraiser would call for the above if he sees any paint that is flaking, pealing, etc.

The moment of truth is when the appraiser checks the property out which I hope is soon so I can get it off my back already.

My experience thus far, buying a house is NOT easy!

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