San Diego's current housing shortage provides current homeowners and home purchasers the chance to renovate a home with your style and design in mind. 203k FHA Renovation Loans are not for the faint of heart. My advice: Have a plan, find a solid contractor, and set expectations. In addition, work with a loan officer that has either many years in the business or has completed many, many renovation loans. A solid mortgage advisor is not only helpful and will expedite the process, they are worth their weight in gold.
San Diego Renovation Loans: Quick List for 203k Loans
1. Have a Plan: Make a list and separate "needs" from "wants". This will be helpful when hiring a contractor to itemize your priorities. Take inventory of the house yourself and be prepared for the contractor to find things outside your scope. Consider paying for a home inspection. This independent 3rd party will assess all the challenges your home currently faces. A contractor can work off this inspection, saving time and money.
2. Find a Contractor: Contractors are a plenty, however, find one that really understand the needs of the job. Lenders want all I's dotted and T's crossed. Liability insurance and workmen's compensation are required. In some cases, depending on the renovation expenses, they will will be accountable to a 3rd party that will oversee their work. Remember, you're working on the lenders money. Be clear and specific. A contract will be signed prior to commissioning work.
3. Set Expectations: Understand your goals and communicate them to the contractor. Check in and insure they are being met along the way. Open communication and setting expectations up front will save everyone time. Talk to a real estate professional and/or your mortgage consultant on what renovations will add value to the home, i.e. new windows, central heat/air, electrical, etc. This may assist in selecting a "need" over a "want" as it increases your property value and ultimately your equity in the home.
When in doubt. Ask your lender. Making changes to estimates or sub-contractors selected can be a recipe for disaster. Always, always ask your lender first and get it in writing. Communication and written proof that a change has been approved are key to keeping more money towards the project. Take good notes and save receipts and invoices. They can become your lifeline to communicating with all parties. Fix it, don't nix it!