Mortgage/loan gurus step inside

[Mayberry]

My wife and I are in the middle of adopting from overseas, which is quite costly. All the financial benefits come at the end of the process, tax credit, employer reimbursements, etc. We are looking into ways to come up with the $$$ on the front side. So there is the background, here is my question:

We bought our house 5 years ago and it appraised for $70K. It needed lots of work including all new paint, flooring, and general remodeling. We have since most of that including all new flooring and painting. There are still some small items that need to be done that I have not got around to. We paid $62K for it. Now that the remodeling and refurbishing has been done, it should appraise for more. Since we were newly married, we opted for the 30 yr mortgage at the time, so we have not made much ground on equity. I would say we owe around $59k now. Here is the moral of the story, what would I need to do to refinance and borrow at what it should appraise at now to (1) shorten the term to 20 yrs (2) borrow the $$$ needed for the adoption? What should I expect in closing costs, appraisal fees, etc?

Also, one of our neighbors, whose house is smaller, older and in need of general refurbishing (but she has 2 more acres than us) home just appraised at $90K and she is trying to sell for $135K.

What advice, options, opinions do you have to offer?

[aaron]

why would you want to shorten it to 20 years?

[King Kong]

Hey Mayberry

Glad to have you here. I am not a financial consultant or a banker but I have owned a couple of houses. First I would try to refinance my house. Keep in consideration your interest rate, which is going to be greatly based off of your credit score. There is a refinance loan that is called the 125%. You can refinance your house with some banks like MBNA for 125% the total net worth of the house. For example if your house is worth $75,000.00 then you can refinance the house for $100,000.00. This will fall under remodeling. You are basically telling the bank that you want 125% of your homes value so you can take the extra money over the homes net worth to make repairs to the home. Now in reality once you get the check you can do what ever you want with it. At the same time you are refinancing your home have your account manager look into some 20 year notes for you. Keep in mind your monthly payments will go up but you will be saving a ton in interest. Also if you make a double payment on your home twice each year you can reduce your payoff time over 20 years by ¼.
Well I hope this help you.

[Mayberry]

Thanks for the information. I will probably only own the house for another 5 years, so 125% of the value may not put me where I will need to be when I attempt to sell, but 100% of the value now will free up the extra $$ I need to finalize the adoption process and get out in 5 years with a little bit of equity built up.

Thanks for the welcome aboard also. I post on a variety of specialty forums, but since I do work and live here in Hattiesburg, I might as well check in here from time to time.

[F150]

Hello. Well here is some answers for you. Of course there are some variables, but here is a general idea for you. I am assuming that your appraisal charge will range from $350 to $400. I am also assuming that your home would appraise for $90,000.

Based on a loan payoff of $59,000, you would probably be able to take out about $27,000 in equity, with closing costs of about $3,800. The $3,800 of closing costs cover an assumed $400 appraisal fee as well as title insurance fees, escrow fees, etc..

There are other factors of course that are not in this, such as credit and whatnot. If your score is 620 or over though, you will be fine

[F150]

btw, that was posted by a friend of mine.