Best way to pay for a home additon/renovation???
Question: I think we’re going to have a 2 story addition built to our house and possibly finish the basement. My understanding is that as far as financing is concerned there are 2 ways to go. We could get a home equity loan or line of credit or we could do a refinance our mortgage with cashout. Any other way?
What are the plusses and minuses of each way? Also, do either of these ways allow the appraiser or the bank to take into consideration the final value of the house *after* the addition/renovation is complete? That would allow us to have more equity in our home and then potentially a larger loan.
Answer: You pretty much summed your options up. The only other one I can think of is paying cash. Refinancing primary mortgages is often pretty expensive, you face closing costs and points which could end up costing you thousands. Taking out a second mortgage may be cheaper fee wise, but you may pay a slightly higher interest rate. You really need to talk to a few lenders to see what your best options are. I have no idea if you can borrow against potential equity or not. Another question for you lender.
I suspect a lot has to do with how much equity you currently have, what your current incomes are, and how good your credit is.
Related Posts
Filed under: Home Equity Loan
Leave a Comment
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
TrackBack URL | RSS feed for comments on this post.