Posted on: 16th Dec, 2012 11:52 pm
i want to refinance and borrow additional monies to be able to afford the $15k additional work i want done to my house. since my wife isn’t working i want to borrow against the house when i refinance. the house would be finished and its value should be about $165k, greatly exceeding the $15k i put into it. what kind of loan can i get or should i look at? (i’m eligible for a va loan as well.) and is it worth it to refinance with only 3-4 years left in the house?
You can apply for VA loans as they are available at quite a lower rate. Moreover the rate of interest that will be offered to you may be lower than that of conventional loans. However, if you refinance the loan, you will be liable for paying the closing costs. If you can't offset them within 3-4 years, then it won't make much sense in refinancing the loan.
It really doesn't make sense to go for a refinance with only 3 to 4 years left on your loan. Rather take a shot at the VA loans since you can get them at a lower rate as well.
You could do a HELOC if you have equity in the house, however, very few lenders offer these nowadays. You could look at FHA 203K on a 15 year term rather than a 30 year, if time is an issue. The 203K will allow you to borrow 30K above your value which can be used for renovations to the house. Our you can just do a straight cashout refi. If you would like to discuss your options, feel free to contact us.
Refinance is just taking out a new loan. All the costs associated with taking out a new loan are applicable in case of refinancing also. Since only 3 to 4 years are left in loan servicing, it may not seem to be good step to opt for refinancing. Go for a VA loan.