I'm thinking of doing some renovation to my home, and I'm planning on refinancing. I bought my house about 2 years ago, and I want to add a deck, a door leading to the deck, second bathroom in the basement, and a larger more appealing front entry door (mine opens outward-hurrican style). I should be able to pull about $70k on my home to handle all this and pay off some other bills. So, I guess I could contact the guy who did my original mortgage, or go some other way. What do you folks recommend as the best way to handle this? Where will I get the best deals on refi's, and what doi I need to look for? Whats the deal with the fat DiTech guy? Is it worth bothering with them? Also, when they do the reappraisal on my home, are there things I should do to help increase the appraisal value?

Thanks,

Stavs

I refinanced my mortgage in 2004 to switch from a 30 year to a 20 year (saving me approx. $80k in interest), and I just approached my local bank, where I held my 30 year mortgage. I got what I felt was a very competitive rate, and since I was doing a refi with my existing lender, I didn't have to provide any employment certification. I also recall there being less paperwork as well, but I forget the specifics.

I've refied a bunch of times, using everyone from LendingTree and Ditech to my regular bank. Most programs seem pretty even as far as interest rates and terms, the thing I look for is how they handle fees.

Some lenders will claim there is no charge for their loan/refi, but when you look at it, the charges have been added in to the principal, so in effect you are financing the loan charges. Sometimes these can be pretty hefty fees.

Washington Mutual and Countrywide both had fees, but they were small compared to some other deals I have done over the years. Try starting with your local bank and see what they can do for you. A loan broker is another option; my cousin is one, so I had it pretty easy when he handled things. He wasn't able to do a home equity line of credit, though, so last time I went right through my bank (Washington Mutual).

Good luck,
Sam

When you re-finance your home, more so to take extra cash out for repairs/bills/etc...are you left with just the one, single mortgage again...or do lenders (and credit reports) see it as a 'second mortgage' should you be wanting to sell the house later on?

if it is one loan, it's the first.

if you have multiple loans, they are ordinally referred/labelled.

I think.

I've never had an additional (second) mortgage. But, all that equity in your home (like mine) just goes to waste if you could be doing other things with it.

i used Lending Tree to do a refi earlier this year and it was a positive experience.

What are the current terms of your mortgage? Since rates have generally gone up in the since two years ago, aren't the refi rates higher than your original mortgage? If so, it probably makes more financial sense to do a HELOC or 2nd mortgage to minimize the amount of loan that is at the higher rate. You should only look for a "no fee" loan when you refi to get the max tax writeoff, but be aware that all "no fee" means is that the fees are rolled into the loan in the form of higher (though deductible) interest rates. You need to shop around for the best rates...there is a lot of difference. I recommend as a base that you check out the loan calculators at [providentfunding.com] and some of your local banks. You also need to do the math to figure out what makes the most sense. If you can't do the math, find someone who can.

Well, my current loan is at 5.75%. I already have a HE Loan out so I want to combine the two. The higher interest rate on the Refi will be an issue, but it also gets me out of paying the PMI on my FHA Loan. It will probably be a wash between the two. Plus the interest is deducatble, while the PMI is not. Even though I have over 20% equity in the home now, FHA will not remove the PMI (which is like $45 a month.)

Stavs

I doubt you'll be able to beat that rate by refinancing. Like I said...do the math. Set up a spreadsheet with the different options and look at the after tax bottom line. The only reason to do a refi is to get a lower overall rate. It would be silly to combine the loans only to end up paying MORE. Calculate the effective interest rate on both current loans plus including adding the cost of PMI to your payment...I'd guess that PMI doesn't affect the rate by more than 1/10th of a point. If you can't beat that then don't do a full refi.

Also, why can't you get rid of the PMI? Is it because your HE loan makes your real equity less than 20%?

I was told that on FHA, they will not remove the PMI. Is it just so they get the extra payments?

Stavs