Refinance with cash out?

[Club'nBabySeals]

My husband and I bought a home a little more than two years ago--it was a bit of a 'fixer-upper' so we got it relatively cheap compared to home prices in the rest of the neighborhood, but we've put a ton of work (and more than $30K) into it so far.

Now we've decided that it needs new siding and a new roof. The estimates I've gotten so far range from $18K-$28K.


We were planning to refinance anyhow; but now that this has come up we're wondering if we should do a refinance for more than what we owe so that we'll have the cash on hand to pay for the siding/roof.


Has anyone done this? Was it worth it, or would you do it differently?

What mortgage groups are best for this sort of thing? I checked with Cedar Point, but their fees seem a bit steep (though I'm far from an expert on what they should be).


Any insight would be much appreciated. Thanks!

 

[Midnightrider]

My husband and I bought a home a little more than two years ago--it was a bit of a 'fixer-upper' so we got it relatively cheap compared to home prices in the rest of the neighborhood, but we've put a ton of work (and more than $30K) into it so far.

Now we've decided that it needs new siding and a new roof. The estimates I've gotten so far range from $18K-$28K.


We were planning to refinance anyhow; but now that this has come up we're wondering if we should do a refinance for more than what we owe so that we'll have the cash on hand to pay for the siding/roof.


Has anyone done this? Was it worth it, or would you do it differently?

What mortgage groups are best for this sort of thing? I checked with Cedar Point, but their fees seem a bit steep (though I'm far from an expert on what they should be).


Any insight would be much appreciated. Thanks!

I just refied mine to do an addition, unless you got taken when you bought the place you shouldn't have too much trouble taking money out. I went with USAA, but its a private insurance/banking company and you can't use them unless you are a member.

Oh, and BTW, i'll do the siding and roof for ya for $27,500

 

[bismark]

My husband and I bought a home a little more than two years ago--it was a bit of a 'fixer-upper' so we got it relatively cheap compared to home prices in the rest of the neighborhood, but we've put a ton of work (and more than $30K) into it so far.

Now we've decided that it needs new siding and a new roof. The estimates I've gotten so far range from $18K-$28K.


We were planning to refinance anyhow; but now that this has come up we're wondering if we should do a refinance for more than what we owe so that we'll have the cash on hand to pay for the siding/roof.


Has anyone done this? Was it worth it, or would you do it differently?

What mortgage groups are best for this sort of thing? I checked with Cedar Point, but their fees seem a bit steep (though I'm far from an expert on what they should be).


Any insight would be much appreciated. Thanks!

Yes, that is a valid reason to do a re-fi. Although you need to be aware that you will be paying for the roof and siding for 30 years. This doens't matter if you don't plan on being there that long.

If you would prefer a different route, use a home equity line of credit or second mortgage.

All your options have plusses and minues. Contact Bill Hocker at Countrywide in Waldorf 800-439-0940 ext 1228. He'll give you good advice. He has very good ethics.

What ever you do stay away from interest only or ARM loans. They are not advantageous to most consumers...

 

[Chasey_Lane]

My husband and I bought a home a little more than two years ago--it was a bit of a 'fixer-upper' so we got it relatively cheap compared to home prices in the rest of the neighborhood, but we've put a ton of work (and more than $30K) into it so far.

Now we've decided that it needs new siding and a new roof. The estimates I've gotten so far range from $18K-$28K.


We were planning to refinance anyhow; but now that this has come up we're wondering if we should do a refinance for more than what we owe so that we'll have the cash on hand to pay for the siding/roof.


Has anyone done this? Was it worth it, or would you do it differently?

What mortgage groups are best for this sort of thing? I checked with Cedar Point, but their fees seem a bit steep (though I'm far from an expert on what they should be).


Any insight would be much appreciated. Thanks!

How long do you plan on living in the house? If you want to purchase w/in the next few years, taking money out might not be a good idea if you want the equity to put down on something later. Just remember that you'll be paying interest on that money for the rest of the loan.

 

[Oz]

I used Amerisave dot com for my refinance, and HELOC. Very pleased with the results from both transactions.

Secondly, for your roof and siding, check out Roofing by George in Mechanicsville. I have a fairly good sized roof (35 square) and they removed the old shingles and put the new roof on, and cleaned up the mess in one day. My neighbors were amazed and so was I. When I couldn't get someone to show up to give me an estimate, George was there early, gave me a price on the spot and completed the project exactly as promised. That roof is the best investment I have made in my home since I bought the house new in 95.

 

[desertrat]

Good way to go, just don't borrow more than the place is really worth. Other option as was mentioned is a home equity loan.

 

[Club'nBabySeals]

I went with USAA, but its a private insurance/banking company and you can't use them unless you are a member.

I am not a USAA member, but may I ask what you paid in fees (if you're not comfortable sharing that information I understand). Cedar Point is asking something to the tune of $8K, and I'm curious if that is the ballpark range I should be expecting elsewhere, too.

All your options have plusses and minues. Contact Bill Hocker at Countrywide in Waldorf 800-439-0940 ext 1228. He'll give you good advice. He has very good ethics.

Thank you! I'll give him a call.

How long do you plan on living in the house? If you want to purchase w/in the next few years, taking money out might not be a good idea if you want the equity to put down on something later. Just remember that you'll be paying interest on that money for the rest of the loan.

We plan to sell within the next two years. Unfortunately, I don't believe anyone would have any interest in looking at the place unless we get new siding (at the very least). The roof is gravy, but I figured that we might as well.

 

[bismark]

I am not a USAA member, but may I ask what you paid in fees (if you're not comfortable sharing that information I understand). Cedar Point is asking something to the tune of $8K, and I'm curious if that is the ballpark range I should be expecting elsewhere, too.




Thank you! I'll give him a call.





We plan to sell within the next two years. Unfortunately, I don't believe anyone would have any interest in looking at the place unless we get new siding (at the very least). The roof is gravy, but I figured that we might as well.

Whoa...hold on...IF the roof doesn't need to be replaced and will not need to be replaced by the time you sell, why put the money into it? Be careful spending that kind dough on a house you plan on selling in two years.

Also...if you ARE deadset on selling in two years an interest only loan is feasible...but be VERY careful. Those loans have many booby traps in them.

Each time we did a re-fi it (3 of them in 4 years...rates kept dropping) it cost 1-2% of the amount of the loan we took. I forget the exact percentage.

 

[Club'nBabySeals]

Whoa...hold on...IF the roof doesn't need to be replaced and will not need to be replaced by the time you sell, why put the money into it? Be careful spending that kind dough on a house you plan on selling in two years.

The contractors seem to be cutting us better deals if we do the siding and the roof together.

Our roof isn't in horrible shape; but it's not in great (or even good) shape either. It's twenty years old. I'm forever picking up old shingles that have blown off out of the yard when I mow; and there is visible moss growing on it in some of the shaded spots. I suppose not doing it is worth considering; but my husband is of the opinion that keeping the old one might turn away prospective buyers.

Also...if you ARE deadset on selling in two years an interest only loan is feasible...but be VERY careful. Those loans have many booby traps in them.

We're in one of those right now...It seemed like a good idea at the time because we were only expecting to be here for three years total; but due to unforeseen circumstances our stay was pushed out to five. We were screwy first time homebuyers and erroneously assumed that everything would work out to fit with our master plan...That's why we're refinancing.

 

[Pete]

I agree with the HEL suggestion. If you financed 2 years ago your rate is probably in the 5's. Refi the whole thing and you are looking in the upper 6's. Do a HEL for the amount you need.

 

[bismark]

The contractors seem to be cutting us better deals if we do the siding and the roof together.

Our roof isn't in horrible shape; but it's not in great (or even good) shape either. It's twenty years old. I'm forever picking up old shingles that have blown off out of the yard when I mow; and there is visible moss growing on it in some of the shaded spots. I suppose not doing it is worth considering; but my husband is of the opinion that keeping the old one might turn away prospective buyers.




We're in one of those right now...It seemed like a good idea at the time because we were only expecting to be here for three years total; but due to unforeseen circumstances our stay was pushed out to five. We were screwy first time homebuyers and erroneously assumed that everything would work out to fit with our master plan...That's why we're refinancing.

Ok...just wanted to make sure roof work needed to get done. Hate to see you spend money you don't need to spend.


We see lots of folks with those interest only loans...great deal for the broker....great deal for the bank...lousy deal for the home owner.

I called one of the companies once and asked them to explain how their 1% advertised loan ended up with a 5% APY (fine print at the bottom of the post card). No one could explain it to me...not that I am too thick to understand...they didn't even try.

The home equity lines of credit also have floating interest rates (they can change monthly) and shorter repayment periods...make sure you understand the differences between those and the conventional fixed.

If you are not going to be there long, I would suggest the 30yr conventional route...your payments may be less and you'll pay mostly interest in the first few years...which maximizes the tax deduction.

 

[rdkarob]

I am not a USAA member, but may I ask what you paid in fees (if you're not comfortable sharing that information I understand). Cedar Point is asking something to the tune of $8K, and I'm curious if that is the ballpark range I should be expecting elsewhere, too.




Thank you! I'll give him a call.





We plan to sell within the next two years. Unfortunately, I don't believe anyone would have any interest in looking at the place unless we get new siding (at the very least). The roof is gravy, but I figured that we might as well.

Do it yourself!!! We did ours, my wife helped, just me and her and it looks excellent. Get a book, or how to on the internet. It was very easy and took us 32 hours, 1 weekend to do the back and 1 side, including the demo and 1 weekend for the front and one side

 

[Vince]

Whoa...hold on...IF the roof doesn't need to be replaced and will not need to be replaced by the time you sell, why put the money into it? Be careful spending that kind dough on a house you plan on selling in two years.

Most definitely. I refinanced 6 years ago. Needed extra money to pay off the ex and put my daughter through college. Took a 15 year mortgage, but then I was only down to about 12 years left to pay on the original 30 year. Only advantage was my interest rate on the 30 year was around 8% and I refinanced at 5.5% I guess the timing was right, but it was something I had to do to keep the house and a roof over my kids. Of course this year my mortgage went up due to the tax hike.

 

[Club'nBabySeals]

Do it yourself!!! We did ours, my wife helped, just me and her and it looks excellent. Get a book, or how to on the internet. It was very easy and took us 32 hours, 1 weekend to do the back and 1 side, including the demo and 1 weekend for the front and one side

That made me laugh....If it can't be done on the computer, my husband doesn't do it. And I'm just not that handy with a nail gun.

 

[Makavide]

Don't forget to talk with your current lender. If you have been a good customer, most of them are willing to cut down on refinance costs to keep you money. When we refinanced we stayed with the same lender and all closing costs and filing fees were waived.

 

[Guesswho3256]

I just refinanced with cash out, 5.895%. The closing costs were about 4000. I used national city mortgage.

I also had my siding done (gutters and downspouts too) a few years ago and I had my roof re-flapped. The total was $9,500 I believe. Granted my house is small, but it's not THAT small.

 

[desertrat]

Don't forget to talk with your current lender. If you have been a good customer, most of them are willing to cut down on refinance costs to keep you money. When we refinanced we stayed with the same lender and all closing costs and filing fees were waived.

Yep.

 

[Christy]

For home repairs, a better option (for us) was to go with a home equity line of credit. We did ours with Bank of America and there were ZERO fees like you would have with a complete refinance.

 

[bismark]

For home repairs, a better option (for us) was to go with a home equity line of credit. We did ours with Bank of America and there were ZERO fees like you would have with a complete refinance.

The HELOC doesn't work as well in this case. The original poster wants to get free of an interest only loan so she will need to do the re-fi.

Also... HELOCs have floating interest rates and are currently much higher than 30 yr fixed. HELOCs also have shorter repayment time. So the HELOC will cost more per month that the re-fi will.

I used a HELOC a few years back to buy an office condo. The rate was something like 4%. It was great until last year, when it got to 7.5%. I flipped that loan along with remainder of my car loan to a 2% interest credit card last year. Its a sweet deal if you have the discipline to pay the card off and pay it on time.

 

[forestal]

Whatever you do stay away from Adjustable Rate Mortgages, a 15 or 30 year flat rate is best. Make sure there is no pre-payment penalty.

You don't want to be forced into selling your house for less than it's worth.