Financing an ADU in today’s
market

Presented by
Advantis Credit Union
Self Financed Options
> Pay cash from your own funds
> Borrow against an IRA or 401k (if

available)
> Borrow from Family
...
The Advantis Rehab Mortgage
(Available for ADU’s)
> What is a rehab mortgage?
> How does it work?
> Benefits and limitatio...
What is a Rehab/ADU loan?
A rehab mortgage is a mortgage loan that
combines the cost of a house and any
needed repairs or ...
Uses of a Rehab/ADU Mortgage
Rehab mortgages can be used for:
> Purchasing a house that needs repairs
> Purchasing a house...
How Does a Rehab Mortgage Work?
> The lender approves the mortgage based

on the current and estimated value of the
home a...
Benefits to a Rehab Mortgage
Property does not have to be repaired
prior to closing
> Lower payments than a home equity pl...
Limitations of a Rehab Mortgage
>
>
>
>
>
>
>

Requires strong credit history
Down payment & hold-back requirements
Too ex...
Qualifications for a Rehab Mortgage
> Down payment requirements (no gifts)
> Good established credit needed
> At least 2 y...
Application Process
> Credit preapproval
> Locate the property and perform a
>
>
>
>

feasibility analysis
Sales contract,...
Comparison Shopping
> Compare loan fees
> Compare loan terms – fixed or variable?
> Know your lender
Questions?

Thank you for coming!
Upcoming SlideShare
Loading in …5
×

Advantis Credit Union Rehab ADU Mortgages

552 views

Published on

Advantis Credit Union presented at Living Room Realty's Monthly Workshop Series: How'd You Do That ADU? on December 5, 2013.

This presentation covers Rehab Mortgages that can be used to finance home improvements as well as ADU construction or conversion.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
552
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Advantis Credit Union Rehab ADU Mortgages

  1. 1. Financing an ADU in today’s market Presented by Advantis Credit Union
  2. 2. Self Financed Options > Pay cash from your own funds > Borrow against an IRA or 401k (if available) > Borrow from Family > Home Equity Loan (Assuming you have the equity based on today’s value)
  3. 3. The Advantis Rehab Mortgage (Available for ADU’s) > What is a rehab mortgage? > How does it work? > Benefits and limitations > Application process > How to find the best deal
  4. 4. What is a Rehab/ADU loan? A rehab mortgage is a mortgage loan that combines the cost of a house and any needed repairs or remodeling.
  5. 5. Uses of a Rehab/ADU Mortgage Rehab mortgages can be used for: > Purchasing a house that needs repairs > Purchasing a house that you intend to remodel (Adding an ADU). > Refinancing your mortgage and borrowing more to make major home improvements.
  6. 6. How Does a Rehab Mortgage Work? > The lender approves the mortgage based on the current and estimated value of the home after improvements. > Purchase money is advanced first. > Remainder of money is advanced in installments as the repairs progress, less holdback. > Inspector approves repairs.
  7. 7. Benefits to a Rehab Mortgage Property does not have to be repaired prior to closing > Lower payments than a home equity plus a mortgage > Can advance more than the current value of the property, allowing major improvements >
  8. 8. Limitations of a Rehab Mortgage > > > > > > > Requires strong credit history Down payment & hold-back requirements Too expensive for small improvements Work done by licensed contractor Only offered for owner-occupied* Mortgage insurance required* FHA appraisal stricter than standard appraisal* * Requirement waived at Advantis
  9. 9. Qualifications for a Rehab Mortgage > Down payment requirements (no gifts) > Good established credit needed > At least 2 years on your job > Debt ratio 45% or less > 2 months savings “reserves”
  10. 10. Application Process > Credit preapproval > Locate the property and perform a > > > > feasibility analysis Sales contract, contingent upon financing Work write-up and cost estimate approved Appraiser provides “as is” and “after renovation” valuation Lender issues formal commitment to lend
  11. 11. Comparison Shopping > Compare loan fees > Compare loan terms – fixed or variable? > Know your lender
  12. 12. Questions? Thank you for coming!

×