Rehab Loans at Cleveland Ohio Mortgage
Definition – Rehab loans are home loans that allow you to get draws to rehabilitate a distressed or undervalued property. Real estate investors usually try to qualify for this type of a loan to avoid using hard money to rehab their houses. The lender would go off from the “subject to” appraisal and appraise the home as it would be when the rehab work is complete. The appraiser will use the blueprints from the contractors to determine what the house will be worth after the work is done. (ie. If you find a house for $50,000 and it is worth $100,000 with $15,000 worth of work, it should appraise for $100,000 on the “subject to” appraisal and you will get draws for your $15,000 worth of work.)
Advantages -Doing a rehab loan using a conventional rehab loan is much cheaper than using a hard money rehab loan. Hard money loans tend to be very expensive and have very high interest rates. If you do not have the cash to do the repairs on the house, this is the way to go.
Disadvantages - This particular loan has very strict guidelines to follow in order to qualify. You will need excellent credit, enough verfiable income, a down payment, and a good background dealing with rehabbing properties.
Back to Home Loan Programs
Here are some of the areas in Ohio where we offer a rehab loan: Canton, Cincinnati, Columbus, Cleveland, Akron, Toledo, Dayton, Hamilton, Lima and Youngstown