Cash out Refi on a new appraisal price - is this an option?

[woowoo]

We need to redo our pool.  It's a must - we'll have to do it before we sell (could be anywhere from 3-10 years) and would rather do it when WE can enjoy it.   There are a few other related improvements we would like to make, and where we live they will all increase the value of our home (certainly not equitable to the cost, but still significant).  The total cost of the project would be around $25K.  We do not have the money saved to make this improvement right now.  


We barely have 20% equity based on the current loan value and not enough to get a HELOC.  We're willing to consider a cash out Refi, but can we do that combined with an appraisal so it's based on the current value of our home?  Our home value has increased probably 20% at a minimum from when we bought the house (based on comps). 

I've only done one basic Refi in my life and never taken a HELOC so I'm a bit clueless as to our options.  

[flygirl]

Almost all refis and HELOC requests will make you get an appraisal done (at least lenders I’ve talked to) so they would base your LTV on the new appraised amount. I’d see which one makes more sense in terms of closing fees, rates and other costs.

[sadlebred]

Have you considered a non-secured personal loan instead? Rates are about 5-7% right now.

[dancingirl21]

We did a cash out refi about 2 years ago. Our lender was thinking they might be able to forgo an appraisal, but we actually pushed for one. We had done a lot of updates that we wanted them to see. Our appraisal ended up being $100k over our purchase price (2 years earlier), so the appraisal worked out well for us and the cash out was no problem.

I think generally your lender will want to do an appraisal. One thing we did that the appraiser was really happy with: we made an excel spreadsheet of all the updates we did with dates and cost. We also included our plans for what we were doing with the money - we were finishing our basement and had the architectural plans. My DH is a general contractor so he was able to draw our plans. Not everyone can do that, I realize.

[woowoo]

Nov 15, 2021 9:36:25 GMT -5 dancingirl21 said:

We did a cash out refi about 2 years ago. Our lender was thinking they might be able to forgo an appraisal, but we actually pushed for one. We had done a lot of updates that we wanted them to see. Our appraisal ended up being $100k over our purchase price (2 years earlier), so the appraisal worked out well for us and the cash out was no problem.

I think generally your lender will want to do an appraisal. One thing we did that the appraiser was really happy with: we made an excel spreadsheet of all the updates we did with dates and cost. We also included our plans for what we were doing with the money - we were finishing our basement and had the architectural plans. My DH is a general contractor so he was able to draw our plans. Not everyone can do that, I realize.

This is helpful - thank you! 

[keyslover]

woowoo, are you talking about the cash out based on the new finished work appraisal?

Because I think that should be an option. I am really of no help, but complaining. We want to do some major work and wanted to cash out refi, but due to LTV we cannot get as much as we thought/wanted. BUT, the improvements would make the house worth more money! UGH, I am rambling and feeling like we will be stuck with our small house forever because I don't know where to get the money to add on.

[keyslover]

Ok, so just found out there is something called a Future Value Construction Loan. Which is basically what I was looking for, at least I think/hope it is.