I'm trying to do some renovations to my home and also build a garage. Looking for advice as to what to do. I don't have much equity in my home right now but after the renovations and garage it will up the value of my home. Looking to do about $30,000 worth of work.
Good luck dude.....hope you have $30,000 cash available
that's what I was afraid ofOriginally Posted by mikepags
Not sure about IN, but in SC refinancing with a construction loan that rolls into fixed 30 year loan based on the price once finished might be an option. It was a couple years ago when I remodeled my house. Everything I've seen since then makes me think lending standards and products have gotten better or Atleast stayed the same. I'm not sure how much credit you will get on the appraisal for garage though, and I'm guessing that will be where you are spending the majority of the 30k. I'm sure that is what Pags is referring to.
It is possible to do with very little cash down if it will appraise for the right price. I'd have an appraisal done and make sure they know what renovations you will be doing. An appraisal will run you 400 or less. This will allow you to see if it's worth it.
If you are going to have an appraisal done, you might as well apply for a loan. The bank can't use your appraisal and will have to order one. No sense in paying for one twice.
You could get a personal loan, but will likely have higher interest rate.
You are correct but the bank usually runs everything before they do the appraisal and you end up with more expense. We were going to build a home before we ended finding the home were in. Appraisal ran me 400 and all the other fees with the bank ran me 600 for a total of 1k and didn't even end up using it.
They won't give u much value for garage on the apprasial
True, unless the space above it is heated, like a gym, theater room, man cave...etc. then it is increasing your square footage
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Another reason to belong to a credit union.------Heloc loans. Our credit union offers one that stays open for 7 years, before the 7 years is up, take another loan out-- even a few hundred to extend the time for another 7 years. Why? 2.7% interest.
Aren't we all supposed to be paying cash for everything lol?
#1 If you can do the whole 2 car garage finished with electricity for 30K you got a decent buy. That won't add square footage on the house. The renovations will make the Mrs happy and MAYBE help your comps depending on the other homes in your price range?? We just did appliances, decent ones were about 4K on sale with my military discount. We wouldn't get that back on resale!! Nor would we get back the cost of hardwood floors and granite countertops we did last year. Did I mention all this makes for a happy wife? I mentioned this twice because that's about all I'm getting for this.
^^^ This
Also, I'm in a similar situation. Looked into building a garage on our lot, my hope was to add value to the land while using the garage to alleviate a $120 per month storage payment. simple and feasible plan in my opinion but with all the building hoops you have to jump through and the fact I've been told it wont add much if any value to the property made it less attractive.
Best thing you can do is sit down with some lenders crash numbers.
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Go to your local bank, credit union, etc., as they will know the area better than anyone on the BBC.
As a lender, I can tell you this: If you spend 30K in improvements, you MIGHT get $15k in added value, probably less than that, closer to 33% of what you spent. If you have very little equity in the property, and you are going to add 30K to the Combined Loan to Value, (CLTV) but only add $15k at most in property value, I think you will find the banks are very leary of loaning you more money than the property is worth with the improvements. If they are selling their servicing on the national level, I can promise you they won't do it because no one will buy that loan from them. If they in house the loan, typically they want an 80% CLTV, which is sounds like you don't have at the moment. It will all come down to what will be the total amount of loan(s) verses what the value of the property will be with the improvements. Hopefully you currently have more equity than you think.
Go talk to a bank about a re-finance. It will be cheaper than any other loan you get. You probably won't be able to find a straight Home Equity Loan, all we could find were Home Equity Line of Credit, and we're at the tail end of our mortgage.
We did a line of credit loan with our CU for $50K. Interest was low and when we had final inspection, we had it converted to a fixed loan mortgage.
We just pulled $35k out of our place for my boat garage. Wasn't nothing but a thing to do. But our real estate market is BOOMING!
We figure we will about double our investment as we will be the only 3 car garage in the neighborhood.
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^ that was the long version that I was to lazy to type out....only thing I will add is be prepared for a 75% CLTV offer
Typically, with a construction /renovation type loan, they will do a pre construction appraisal and a post or final inspection. If the final comes in less, you better have some cash or they will stick you in an adjustable rate Untill you can get your ratios in check. Doesn't happen often, but I've seen it quite a few times and it basically leaves you stuck at the mercy of the bank. Appraisals are based on comps, typically banks require comps within the last 12 months, so some or all the comps used on your pre appraisal are usually older than 12 months by time of completion and if there aren't strong comps at that point you could be underwater quick.
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