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Home improvement financing...S&R

1,449 Views | 7 Replies | Last: 5 yr ago by BigCountryAg
BigCountryAg
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AG
(X-referenced in the HI board)

My wife and I are looking into doing a pretty substantial renovation on our home that was built in 1980. Looking to add 1000-1200sf and modifying existing space pretty extensively to bring it into the modern era. Will need around $125-$150K.

I've been in the building business my whole life and in my previous career I owned a custom homebuilding company for about 7 yrs. I've done 100% of the improvements on this house so far by myself...but I just turned 48, I'm tired and it's getting old and taking far too long. Besides that, there are just far too many fish to catch at the coast that need my full attention.

I am all too familiar with the building side of things as well as new-construction interim financing but financing for a substantial home improvement project is different and I'd like to deal with a lender that knows that process.

Once the improvements are complete I want to refi our existing mortgage and the HI loan into a single mortgage loan. Have good credit and should have plenty of equity in this property to make this work just don't quite understand the best way to make it happen.

I'm in the Liberty Hill, NW Austin area and would prefer to work with someone local if possible but these days, that may not be necessary.

Looking for guidance on this matter...thanks in advance.
"Give a man a fish and you feed him for a day...DON'T teach a man to fish, and you feed yourself. He's a grown man...and fishing's not that hard" - Ron Swanson
SteveBott
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AG
I'm mortgage and can offer advise but need more info. My contact is in my profile. I'm in Round Rock but that does not make much difference in loans nowadays.
Charismatic Megafauna
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My understanding with home improvement loans is there's a lot of red tape/oversight on the way the money is used, and the rates aren't that good. Assuming have enough equity in the property/home as it currently sits, I'd be inclined to just do a cash-out refi and do your renovations as you see fit with the equity you pulled out.

Otherwise maybe get a personal line of credit from your bank or CU and do the work with that, then cash-out refi after the renovations are done and pay the personal loan back.

Last option may be borrowing against a retirement account?
SteveBott
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AG
You are on the right trail
Red Pear Realty
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AG
This is the correct answer.
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
jja79
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AG
Not knowing your equity position and whether that's an option I'll offer an alternative. We have a loan program that pays off the existing mortgage, finances the improvements and closes the new mortgage before the renovations begin. The critical issue is the appraisal which is completed as if the renovation is completed.

First one of these I did was with a Texags poster on an older house in Houston. Worked well. They moved in just before Christmas.
I Ramp Ag
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I looked into getting a home improvement loan last year. The banks wants you to have a G.C. You cannot be your own G.C. Found out it was easier to get a loan against a 401k.
SteveBott
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AG
If you need 100-120k usually the 401 will not let you borrow that much. 50k is a common limit I've seen.
BigCountryAg
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jja79 said:

Not knowing your equity position and whether that's an option I'll offer an alternative. We have a loan program that pays off the existing mortgage, finances the improvements and closes the new mortgage before the renovations begin. The critical issue is the appraisal which is completed as if the renovation is completed.

First one of these I did was with a Texags poster on an older house in Houston. Worked well. They moved in just before Christmas.
This sounds really interesting to me.

We're located smack dab in a crazy-booming market in Liberty Hill. 5 new acerage developments popped into development in just the past year or so within a few miles of our property. Homes selling for $150-$200/ft. Appraisal shouldn't be an issue.

contact me at donaldjoe2@gmail.com
"Give a man a fish and you feed him for a day...DON'T teach a man to fish, and you feed yourself. He's a grown man...and fishing's not that hard" - Ron Swanson
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