Wanting to refinance my house and get some work done

[11b1776]

I am just wanting some advice. I want to refinance my home and get a few things fixed. How is the best way to go about this, I mean do I need estimates first, do I talk to the bank first? What's the best way to make sure anyone that works on my house is legit, BBB, Angie's list, references? Is it going to be harder right now to get extra money?

I want to get my house inspected for settling, I want someone independant not someone from a foundation repair company trying to sell me something. Where do I look?

 

[dru]

So are you trying to refinance to lower your monthly payment to free up extra money with which to fix these things or are you talking about a cash-out refinance where you refinance and tack the cash out amount to the mortgage to be paid back over the life of the new mortgage?

In either case, first before you go and talk to a bank, make sure you have enough equity in your house to do this (it will save you the time and trouble of approaching banks only to have them turn you down). Banks vary on their percentages that they like to have in equity so I can't give you a good number there but if you are underwater, or have little equity in your home, then your chances are much worse.

Also, if you would like to avoid the refinancing, you could also consider taking out a home equity line of credit (HELOC). This usually has a shorter term than a refinance, and the process is generally faster and has far smaller fees and costs associated with it than a refinance. Downside is that it has a shorter term, and usually a higher interest rate than a re-finance, which both act to increase your monthly payment goal.

Assuming that you still want to do a re-finance, research banks. The BBB is good, but honestly just ask your friends, family, neighbors, church associates, co-workers, etc. See what they recommend. Also, there are a number of good online solutions. Try lendingtree.com, quickenloans.com and others that you can find through google searching. Avoid the shady ones and even the online banks will be easy to deal with.

Forgot to add: Get estimates for the amount that all this fixing will cost you and THEN you will have an idea for the amount of the loan you will need. Then go to the bank

Second edit: Not sure who you would ask about the settling issue, but I would seek out a reputable home inspector. If they can't tell you whether or not its settling, I'm sure they would be able to point you in the right direction

 

[11b1776]

Ok all good points, I am looking to refinance my home with cash, I could get a lower rate around 2 points, than my current APR. At the very least I want to do that. I really don't know how much my house is worth, we bought it before the market went to crap, it appraised for exactly the agreed upon price, which is now less than I owe. So I want to refinance to lower my payment or refinance with cash to lower or keep the same payment. Could I refinance then get a home equity line of credit?

 

[dru]

Okay so the tables below should help illustrate this. In the first table, these are estimates of your current monthly payment at a given interest rate and mortgage. The second table shows the same thing but what your monthly payment might be after a re-finance that shaves 2% off your rate. The last table shows your average monthly savings as a result of re-financing. Note that this DOES NOT include the costs of refinancing which are significant and on a 100,000 refinance could easily be between 4,000 to 6,000 dollars

Initial interest rate........75,000.....100,000.....150,000.....200,000
7.50%...........................$524.41.....$699.21.....$1,048.82.....$1,398.43
6.50%...........................$474.05.....$632.07.....$948.10.....$1,264.14
5.50%...........................$425.84.....$567.79.....$851.68.....$1,135.58


re-financed rate...........75,000.....100,000.....150,000.....200,000
5.50%..........................$425.84.....$567.79.....$851.68.....$1,135.58
4.50%..........................$380.01.....$506.69.....$760.03.....$1,013.37
3.50%..........................$336.78.....$449.04.....$673.57.....$898.09


Monthly Savings..................75,000.....100,000.....150,000.....200,000
7.5% to 5.5% rate reduction.....$98.57.....$131.43.....$197.14.....$262.85
6.5% to 4.5% rate reduction.....$94.04.....$125.38.....$188.07.....$250.77
5.5% to 3.5% rate reduction.....$89.06.....$118.74.....$178.12.....$237.49

But all this might be a moot point since you said the house is worth less than what you owe one it (you are underwater - which sucks....sort of) Oklahoma wasn't hit as badly as other states by the recession and popping of the housing bubble so you might yet come out ok but your LTV is probably pretty near 100% (lower is better for a refinance, usually). It will probably be pretty difficult to get a re-finance of any sort since you are underwater or close to it on your home.

When you think about it, you are able to get a mortgage because the bank holds your house as collateral. But what bank would effectively loan a huge sum of money for something that is right off the bat worth less than the loan? The same goes for a HELOC. If the value of your home is less than what you owe on it then you have, by definition, no equity. Or rather, negative equity.

If you want to see a (VERY) rough estimate of your home's value, go to zillow.com and find your home. Also, talk to a realtor, they may be able to help you with recently sold homes comparable to yours so that you can get an idea of what its fair market value is at this point. Sorry the news couldn't be better but hope it helps.

ETA: Just realized the formatting on the tables sucks. Sorry about that, but I hope you can read it

 

[11b1776]

I don't know what the house is worth, I owe less than what I paid for it and I owe less than what it appraised for 5 years ago.

 

[twoguns?]

call 3 of the most popular house/foundation companies...inform them you are ...taking bids
home inspectors have a job to do ...and this isnt it.....unless you want their cousin to do it