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Refinance house to include pool?

2,264 Views | 14 Replies | Last: 4 yr ago by Aggie369
Aggie369
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AG
Curious what this process looks like and if there is certain equity needed or certain time constraints on how long I've owned the house. We are currently at 4.4% and I'm seeing I could get that maybe into the mid to high 3% range last I looked.

Any other suggestions for pool financing?

cjsag94
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AG
Pool doesn't affect rules on refinance. 80% ltv to avoid pmi. Otherwise, I'm sure various cash out refi options up to 95%.

Home improvement loans factor in added value for improvement and tie loan payments to contractor payments... But not sure how value credit is given for a pool.

Call a mortgage broker.. this is nothing exotic.
Jay@AgsReward.com
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AG
You can do a first lien cash out loan but state law will only you to borrow up to 80% of the current (before pool) market value. if you have enough equity to get the cash you need for the project this might make sense because assuming good credit you can get the cash and lower your current rate.

If you do not have enough equity you can do a second lien home improvement/pool loan. Because these funds are held in escrow and paid out to the contractor unlike the above option where the money goes to you, the state 80% loan to value restriction does not apply. You can often go up to 95% or so on these type of loans but since they are second lien position they carry higher rate and often have shorter amortizations.
Aggie369
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We put 20% down and have great credit....if I understand correctly a refinance with lower rate would be smartest. The pool cost is well below 80% of the house cost
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Aggie369
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Lol I have no doubt I said something wrong or dont understand

Only need about 20% of house cost for the pool.
cjsag94
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Aggie369 said:

Lol I have no doubt I said something wrong or dont understand

Only need about 20% of house cost for the pool.


YOU really need to call an expert (Jay above seems qualified).
Squirrel Master
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AG
How bloody expensive are pools if you need 20% of your home value to add one?
Jay@AgsReward.com
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AG
Lets put some numbers on it on the first lien cash out option:

if your current mortgage is 100k and the house is worth 200k, per state law you can borrow up to 160k netting 60k after paying off the current 100k mortgage. if your current mortgage is 155k you would only net 5k after paying off the 155k current mortgage.
Aggie369
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AG
We are looking at a pool with a hot tub, chimney/sitting area, and finishing out our covered patio...I dont know the cost yet, just looking at options if I want to do it

Im thinking an average large pool with hot tub would be 70ish and we are looking to do a bit more than that but like I said I havent got the estimate yet
JDCAG (NOT Colin)
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Aggie369 said:

We are looking at a pool with a hot tub, chimney/sitting area, and finishing out our covered patio...I dont know the cost yet, just looking at options if I want to do it

Im thinking an average large pool with hot tub would be 70ish and we are looking to do a bit more than that but like I said I havent got the estimate yet


I'm sure others will correct me if I'm wrong, but given the numbers you've mentioned, here's how it would probably work -

Let's say the pool is 20% of the house, so a $70k pool and a $350k house.

You can only borrow up to 80% of the $350k, so you can borrow up to, or $280k.

If you needed $70k for the pool and could only borrow up to $280k against the house, you would have to owe less than $210k on the house to be able to both pay off the original note.

This would then allow you to take the full 80%, or $280k, pay off the original note of $210k (or less) and have $70k leftover (or more)....

I think that is correct.
Aggie369
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Thanks!
cheeky
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cash-out refi's do not enjoy the competitive mortgage origination rates in the marketplace. Plan on at least 1/2 point higher, or more.

Could consider HELOC or second mortgage if the pool is that important to you and your finances can swing the cash flow and you can't get a better rate on a cash-out refi.
Ducks4brkfast
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Aggie369 said:

We are looking at a pool with a hot tub, chimney/sitting area, and finishing out our covered patio...I dont know the cost yet, just looking at options if I want to do it

Im thinking an average large pool with hot tub would be 70ish and we are looking to do a bit more than that but like I said I havent got the estimate yet
That project will bump up to, or exceed six figures.
deadbq03
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If you can get it out of the ground, I'll let you have my money pit for free.
Aggie369
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Yes, that's my anticipation
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