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Old 05-21-2015, 05:23 PM
 
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Does it make a difference if we upgraded the flooring and added a fence and other small improvements? When we purchased our home, it had old carpet, dated kitchen and an unfenced yard. We did the kitchen and fence.

I have few more things I want to do but unsure if we should wait till cooler times or will it help with the refi which will be late this Summer? I am doing a refi to get the PMI off the loan. I am just over 20% equity but if it helps with doing the rest of the improvements now, I rather have a larger cushion. If I go by sales in the area, there's a definite range and for the level of improvement I have, I am in the lower end of the range. (still have 20% though)
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Old 05-21-2015, 06:56 PM
 
Location: MID ATLANTIC
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This is perhaps the most difficult area to explain to homeowners, and that is dollar spent doesn't translate into equal dollar value. You can spend big bucks updating a kitchen, but if it is compared to another home with an updated kitchen, there could be $0 in the adjustment grid. Your fence could have cost $5000, but an appraiser may only give you $1000. It all depends on the homes they pull for comps. Rarely, does replacing what is already there add significant value, but it will impact the rating for quality of construction which can add value, but no where what you may have paid. Its been my observation adding square footage to a home gives the most value, followed by finishing square footage, and lastly, the frills...French doors replacing sliders, bannister replacement, garage door openers.....the frills not adding much value at all - but some of the most expensive efforts. I fear new carpeting is not going to have the punch you expect.

But don't dispair, there is a way you can hedge your bet! Select a lender that can do an 80/10/10 and in you are shy on the value, you can do an 80/10/10 refi. Meaning any shortfall can be picked up in the 2nd loan (and closing costs - where you calculating those in?).
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Old 05-21-2015, 07:16 PM
 
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Oh we aren't updating to get a better value on a refi, it's something we want to do. And if it's s benefit for the refi we can do it sooner rather than later. I think we will may leave it til later when is cooler if it won't make an impact on the valuation.
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Old 05-22-2015, 07:53 AM
 
Location: MID ATLANTIC
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That makes sense - every day we see disappointed owners, expecting more value due to the money they put out....just keep the 80/10/10 in the back of your head when you are ready to jump on it.

(Apologies for the lack of clarity above - my auto correct is on steroids and only cares if words are spelled right....it doesn't care if the sentence makes sense......)
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Old 05-22-2015, 08:09 AM
 
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Quote:
Originally Posted by momtothree View Post
Does it make a difference if we upgraded the flooring and added a fence and other small improvements? When we purchased our home, it had old carpet, dated kitchen and an unfenced yard. We did the kitchen and fence.

I have few more things I want to do but unsure if we should wait till cooler times or will it help with the refi which will be late this Summer? I am doing a refi to get the PMI off the loan. I am just over 20% equity but if it helps with doing the rest of the improvements now, I rather have a larger cushion. If I go by sales in the area, there's a definite range and for the level of improvement I have, I am in the lower end of the range. (still have 20% though)
Do the refi right now with no cash-out, to avoid PMI. After you get the loan in place, then you can apply for a home equity line of credit with no closing costs.

The extra interest you'll pay is almost certainly well below what you save by avoiding PMI.
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Old 05-22-2015, 08:26 AM
 
7,672 posts, read 9,326,715 times
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Quote:
Originally Posted by ncole1 View Post
Do the refi right now with no cash-out, to avoid PMI. After you get the loan in place, then you can apply for a home equity line of credit with no closing costs.

The extra interest you'll pay is almost certainly well below what you save by avoiding PMI.
The refi will be no cash out regardless. I need to wait for a certain time period as I just bought my home.
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Old 05-22-2015, 05:55 PM
 
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Refine should from my understanding take place if and when necessary for this reason
Loan interest rate was 6percent but since you increased your credit by let's say 100ish or 200ish points and you would qualify for 3percent.
Now 620 credit 6percent
Later 820 credit 3percent

Someone more knowledgeable can fix this but that's my understanding through research.
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Old 05-22-2015, 08:57 PM
 
7,672 posts, read 9,326,715 times
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Quote:
Originally Posted by thornherschel View Post
Refine should from my understanding take place if and when necessary for this reason
Loan interest rate was 6percent but since you increased your credit by let's say 100ish or 200ish points and you would qualify for 3percent.
Now 620 credit 6percent
Later 820 credit 3percent

Someone more knowledgeable can fix this but that's my understanding through research.
I don't know about that one but I am refinancing to get rid of PMI. I have to wait at least 12 months from purchase date according to my lender. I have heard it can be 6 months on here.
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Old 05-25-2015, 07:13 PM
 
Location: Denver CO
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It's not going to be a dollar for dollar return, but yes, the appraisal value should be somewhat higher based on improvements, the same way the selling price would be if you were selling it rather than doing a re-fi. And if you have money to do these improvements, then I'd go ahead and do them, and have the benefit of living with them.
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Old 05-25-2015, 08:25 PM
 
7,672 posts, read 9,326,715 times
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Originally Posted by emm74 View Post
It's not going to be a dollar for dollar return, but yes, the appraisal value should be somewhat higher based on improvements, the same way the selling price would be if you were selling it rather than doing a re-fi. And if you have money to do these improvements, then I'd go ahead and do them, and have the benefit of living with them.
Yeah we decided to wait though, it's waaay too hot! I think this is shaping up to be a really hot Summer. We are going to do some minor stuff inside but leaving the big projects for later in Fall when it's cooler.
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