We just closed on our home. We bought the home for $116,505. The home was appraised at $165,000. It needs a new roof, gutters, garrage and a beam in the basement needs replacing. It could also use new carpet/flooring. How soon can we refinace and take out the equity? Would it be a good idea to take the equity right away for these repairs? None of the repairs have an imediate negative impact on the structural integrity of the home and could wait for a year or two for us to save for the repairs. Please help with some advice. 1st time home owners.
2007-12-13 12:04:36 · 8 answers · asked by huckfin001 2 in Business & Finance ➔ Renting & Real Estate
The loan was 100%
2007-12-13 12:23:35 · update #1
The home was a short sell of $50000, mortgage is fixed rate and there is no prepayment penalty.
2007-12-13 14:43:32 · update #2
I would wait because the lenders that have tightened up won't be able to do anything for you. Also you just closed and the house hasn't really spoken to you yet. Plus you have property tax that is coming due and you may have HOA fees due. The loan won't help you out with those. It is always suggested to at least wait until you have 30% so the banks know you aren't just turning around and flipping houses. This is a RED FLAG to them and it would make it harder for you to get a loan. You would end up refinancing and getting deeper into debt.
I bought my home for $116,900 and it appraised at $146,500 for property tax purposes so watch for that tax bill to come and it will be more than you expect it to be.
2007-12-13 12:46:24 · answer #1 · answered by Anonymous · 0⤊ 0⤋
My first question is how did you get a home at 100% financing and it appraised so high? I do lending and since you just bought the home I would take some time and get use to the payment. I have clients that have gotten themselves in trouble and in debt trying to fix up their home. When the time comes I would try and find a fixed rate home equity loan. Leave the 1st alone because you most likely won't get as good of a rate as you might have and a 1st mtg costs more to do than a 2nd mtg. Also, if you are going to try and refi the 1st and take cash out you need 10% equity in the property to do so and some lenders require seasoning to have taken on the first before they will refinance you.
2007-12-13 21:42:35 · answer #2 · answered by CIFYACAN 2 · 0⤊ 0⤋
I assume you got a 100% loan for the house. Equity loans are generally when you some built into the place. Like a hefty downpayment or have made enough payments to have equity.
The way the market is right now the loan companies are tightening the strings. Repos have never been as high as they are now.
I would suggest a home improvement loan is it was appraised for 20% more then what you paid for it. Then again, that really means nothing. But goto where you got the mortgage from and ask them about a home improvement loan. Shorter term but safer. I am by no means any expert here but (Hey I stayed at Holiday Inn!) no really though, I just sold my house, The bank apraised it for the buyer at 235,000. and would only loan them 195,00, Then did say they would allow them a "home improvement loan at 7 years payoff instead of 30 like the motgage" to help pay the downpayment.
2007-12-13 20:17:33 · answer #3 · answered by richard 4 · 0⤊ 0⤋
I would make those repairs by all means. I have seen the damage a leaky roof can cause first hand. I think you may have to go with a different mortgage company though. I suggest Hometown Banc Corp. My mom used them. They may be your best opportunity for someone to say yes. If your credit does not measure up, they don’t simply “forget to call you back.” They help you get into a credit repair program you can afford regardless of income. Check out the free evaluation form at www.totaldebtsolutionsllc.com and a Hometown loan officer will contact you .
2007-12-14 09:30:49 · answer #4 · answered by Nicki W 2 · 0⤊ 0⤋
Your equity calculation is highly theoretical. When the bank considers a HELOC (home equity line of credit) they are going to do at least a desktop appraisal. Wait 6 months and then you might qualify. When you get the HELOC, just sit on it for a while. The house might start to tell you what it needs after a while and it might be unexpected. This is not a time to bet overextended on theoretical home equity. Don't create your own personal bubble.
2007-12-13 20:28:26 · answer #5 · answered by artwhiterealtor 3 · 0⤊ 0⤋
If the loan was 100%, then your home could not have appraised for $165,000 if you bought it for $116,505.
You would have to wait a year before doing a cash-out refinance, assuming you don't have a prepayment penalty.
2007-12-13 20:49:30 · answer #6 · answered by Expert8675309 7 · 0⤊ 0⤋
You may have to wait for some time before a lender will consider a HELOC for you. These days, they're not chomping at the bit to give out such loans when you've just purchased the property involved. You have some fairly substantial repairs and modifications to make here, from what you state.
2007-12-13 20:47:39 · answer #7 · answered by acermill 7 · 0⤊ 0⤋
I wouldn't fix anything right now...
Since, you said your a first time homeowner... Do you have an option mortgage, or a fixed rate?
especially don't do it, if its not a fixed rate... Still there is no reason to do that now... Apparently, it doesn't bother you too much, or you wouldn't have bought the home..
These type of things should be done, to increase the value of a home when you sell.. Unless, your going to live their until you die, and want to upgrade it a bit... but still just keep the equity there...
2007-12-13 20:14:38 · answer #8 · answered by Nathan 2 · 0⤊ 0⤋