Refinancing my home questions.?????

[Renob]

I was thinking of refinancing the house to pay of all my bills school loans, car loans and credit cards around 30k.
The wife and I bought the house 6 months ago for 81k and I have been remodeling the house and it worth around 120k now. our house payment with tax is just under $800 a month.
Both of our credit ratings are in the mid 700s.
What would be the best way to get the 30k? do a refinance or a equity loan.
I know nothing about these, also how much would I expect our house payment to go up getting 30k.

Is this even soming that can be done.

 

[Renob]

Bump

 

[StageLeft]

It can be done, and in regards to the payment I'd assume that it would be 110/81 * your current payment, approximately

It's probably a good idea, so that you can roll your loans from their high interest into a low. Still, I'd search long and hard into your soul...deep down where you've not gone before, and ask yourself if this is going to fix your current overspending ($30k in credit card debt?!), or if you'll just do it all over again

 

[Renob]

Skoorb thanks for the input, but I DONT have 30k in credit card debt I have 30k in car loans, school loans and credit card, only about 5k in credit cards.

 

[StageLeft]

Originally posted by: Renob
Skoorb thanks for the input, but I DONT have 30k in credit card debt I have 30k in car loans, school loans and credit card, only about 5k in credit cards.

Heh - I only read once and thought you were talking about all three credit cards

 

The wife and I bought the house 6 months ago for 81k and I have been remodeling the house and it worth around 120k now. our house payment with tax is just under $800 a month.

The amount of money you put in, does not necessarily come out in value. Unless the market is showing that a house of your type and size in your neighborhood is selling for that much. 40K in 6 months is around 8% a month appreciation, which is quite a bit. Though, not impossible with this market, depending on area, and supply.

What is your current rate and balance left on the mortgage?
I believe you would be able to accomplish the refi or the home equity. Talk to your bank, or others to see which would be a better option.

 

[NJbronco]

Try the home equity route; it should have a low rate 4-5% and minimal fees. Refinancing could bring a PMI payment and additional points into play.

 

[Renob]

The amount of money you put in, does not necessarily come out in value. Unless the market is showing that a house of your type and size in your neighborhood is selling for that much. 40K in 6 months is around 8% a month appreciation, which is quite a bit. Though, not impossible with this market, depending on area, and supply.

The house was a HUD Repo, our mortgage is $80,209, we only put $15k into but I did all the work. There is a house down the street thats 400sqf smaller and a dump compared to our house that just sold for $109.

 

[Renob]

morning bump

 

[GreenGhost]

Indeed, the appraisal will look primarily at the market value in your area, and they will know was the previous apprs. value was. Unless you had big-time remodeling, with change in area, added central AC unit, etc., you won't get much (assuming the house was in a decent state when you got it). They look at some key items, and things like painting, landscaping, roof fixing do not reflect directly on the appraised value. They go in your favor, but not in the same dollar amount. You now live in a better house, and it will help you when you sell. Enjoy.

I refinanced last year because my rate was too high (8%, now 5.0%), which allowed me to do it in 15-years, not 30. I had the whole house painted, new cabinets, landscaping work, no change in the appraised value. Couldn't get away with closing costs. Those banks who offered no "costs" did not offer me good rates, either. The possibility of being required to pay MPI may exist, and that costs, too. Talk to your current lender and some competitors, too.

 

Originally posted by: Renob
The amount of money you put in, does not necessarily come out in value. Unless the market is showing that a house of your type and size in your neighborhood is selling for that much. 40K in 6 months is around 8% a month appreciation, which is quite a bit. Though, not impossible with this market, depending on area, and supply.

The house was a HUD Repo, our mortgage is $80,209, we only put $15k into but I did all the work. There is a house down the street thats 400sqf smaller and a dump compared to our house that just sold for $109.

Is it the same style house? Ie. ranch compared to a ranch, or a 2 story compared to a 2 story?

I refinanced last year because my rate was too high (8%, now 5.0%), which allowed me to do it in 15-years, not 30. I had the whole house painted, new cabinets, landscaping work, no change in the appraised value. Couldn't get away with closing costs. Those banks who offered no "costs" did not offer me good rates, either. The possibility of being required to pay MPI may exist, and that costs, too. Talk to your current lender and some competitors, too.

Very true. Usually your current lender will give you the best rates/deals. But that's not always true. Shopping around for loans right now is a -must-. Rates went down again, and banks are definatly in some serious competition.

If you want more information on valuation of improved property, drop me an IM, it's my job.

 

[DaWhim]

is this you too?
I would ask to fw and ask those finance gurus

 

[Renob]

Unless you had big-time remodeling

Removed all popcorn textured ceiling then floated out the texture on every wall, then sprayed a nice orange peel texture on walls and ceilings. New floors through out hardwood, tile and carpet. new water heater, new kitchen, new electrical, new baseboard, door jambs and doors, all new light fixtures. new sliding glass door, new garage doors, new insulation. new alarm system. the house was a dump and and still appraised at 110k we got it for 80k

Any more input would be great.


Dawhim thats not me.

Is it the same style house? Ie. ranch compared to a ranch, or a 2 story compared to a 2 story?

Same style

 

Unless you had big-time remodeling

Removed all popcorn textured ceiling then floated out the texture on every wall, then sprayed a nice orange peel texture on walls and ceilings. New floors through out hardwood, tile and carpet. new water heater, new kitchen, new electrical, new baseboard, door jambs and doors, all new light fixtures. new sliding glass door, new garage doors, new insulation. new alarm system. the house was a dump and and still appraised at 110k we got it for 80k

Any more input would be great.

I would have to see the prior appraisal. If it was an FHA appraisal, than condition adjustments were made. As well as a cost to cure schedual written.
If it was not an official HUD or FHA home, then the likelihood of condition adjustments are less.

Typically when remodeling is done, what it does is change the "Effective Age" of a house. Meaning the age at which the house now stands in its improved state. Many houses are 100 years old or so, but because of maintenace and updates, it is effectivly a 10 year old home.

If it appraised out at 110K, than it is very possible it can easily appraise for 120K after your improvements. It really depends on who is doing the appraisal.

 

[Renob]

SampSon thanks for all your info.

BTW the house was an offical HUD house

Hud put $550 in escrow to fix the kitchen lino.

 

[AbsolutZero]

You never said what your current rate is. Even if your house did not appreciate as much as you thought it would, it still might make sense to refi "cash out" your mortgage to consolidate your debts (or most of them) if your current rate is 1% higher than current rates.

 

[Renob]

AbsolutZero

Our current rate is 6.46 percent.

 

[Luke1]

Where is the house located?

 

[PowerEngineer]

Unless you're paying a much higher (than 6.46%) rate on the student loans, I'd let them be. Since I'm not a fan of any car loans, I suggest you consider selling the cars, paying off the car loans, and then using the rest to pay cash for cars you can afford. I suppose you could get a home equity loan to replace the credit card debt, but you'd be better off to get them paid of quickly. Rolling this kind of debt onto your home equity can put your home at risk if you can't make the payments later on. Just my 2 cents....

 

[AbsolutZero]

I agree. Pay off your loans with the highest rates first if your mortgage is at 6.5.

The wife and I made sacrifices early in our marriage (drove used cheap cars, cheap apartment) and paid off a lot of the debt. It pays off in the long term.

 

[Renob]

Where is the house located?

Round Rock TX

I'd let them be. Since I'm not a fan of any car loans, I suggest you consider selling the cars, paying off the car loans, and then using the rest to pay cash for cars you can afford

Its not that we cant afford the cars, I just thought it would be a good idea to pay off the loans now instead of paying $1500 a month on the loans and use the money else were.

Just a thought.