203K or Escrow Account

[rcallstar24]

I need your opinion.

My loan officer explained to me that because the buildings repairs (about $5K) are minor and mostly cosmetic, I should have an escrow account (for about $3K- $5K) and buy with a FHA loan instead of a 203K loan. He explained that the 203K will increase my interest rate and refinancing will not be available for three months, but if buy with the FHA loan/escrow account, I can lock into an interest rate right now.

Which option will benefit me better?

[JakeRodgers]

Do you have the money to put into an escrow account for repairs? If you don’t, then obviously the 203K would be the way to go.

[jfpen]

@rcallstar24 post:1

I need your opinion.

My loan officer explained to me that because the buildings repairs (about $5K) are minor and mostly cosmetic, I should have an escrow account (for about $3K- $5K) and buy with a FHA loan instead of a 203K loan. He explained that the 203K will increase my interest rate and refinancing will not be available for three months, but if buy with the FHA loan/escrow account, I can lock into an interest rate right now.

Which option will benefit me better?

The 203K loan is an FHA loan. A streamlined 203K is for home purchases with < $35K in repairs needed. Are the repairs that are estimated at $5k necessary to make the property eligible to be financed? A repair like that would most likely be something major like a heating system etc…