Renovation Loans???

[Tim Sughrue]

I am currently seriously considering purchasing my first house. I basically found exactly what I was looking for (worst house in best neighborhood). This house is not a "gut job" by any means but it definitely needs a ton of work. (roof, electric, heat ext.) My ideal purchase was either something cheap enough where I would have a low mortgage and have weekly cash to dump into it or if it was closer to my max price it would need minimal work. Of course, I stumble across something that needs a lot of work but is higher than my ideal price range for something like this. I then learned about renovation loans which will give me enough or close to enough money to get what needs to be done to the house. My Realtor suggested a company to go through when the time comes. He also suggested a 203B which I am told is up to $35,000 and is a lot less headache and processes to go through (not really sure what he means by this). I am afraid $35,000 isn't enough, though it may be, I simply don't know. $50,000 I feel would be a sufficient amount because I can cover the basics and may have enough to remodel a kitchen/bathroom. Has anyone done these or is familiar with them? Also, should I seek out a few different mortgage companies and have them bid against each-other for the best interest rates or does it not work like this? Also I am a first time buyer so do I get any beneficial rates like I would with a conventional mortgage?

Thanks in Advance!