need advice from mortgage / re-fi / home eq gurus

[GNFURY]

Ok, so here goes..................

Me and the wife have been in our home now for 3 years +/-. It is our first house, and when we bought it, it was a fixer upper. It is STILL a fixer upper today. Since we got the house we have been dumping all of our own cash into it to fix it up. We got it cheap and in a nice neighborhood so we were ready to dive in. The house was a total wreck and hadn't been touched since 1929 when it was built, but the bones were good. So far we have done alot of fixing that has HAD to increase the value of my home substantially:

- Complete tear off and replacement of roof

- Repaired / refinished original hard wood floors throughout entire house (beautiful!)

- Complete gutting down to studs of main bathroom on 2nd. floor - total remodel

- Complete gutting down to studs of kitchen - total remodel, everything new

- Addition of 2nd. bathroom on main floor (1/2 bath) brand new

- All plumbing replaced, including copper pipe for all feeds and new pvc drains throughout house

- all windows replaced brand new

- Electrical updated to 100 amp service with modern breaker box and additional electrical outlets

- Complete repaint inside, every frickin room, fixed all cracked drywall, etc.

This is about what we have done so far. Unfortunately, we still need more work. The kitchen and bathroom was the most expensive so far, so I think the worst is behind us but - our patience is beginning to wear thin. The original plan was to buy the house, live in it a couple years while fixing it up, then to dump it and move to a nicer house using the profits as a down stroke. Unfortunately - with the economy in it's current state, and with 2008 being predicted to be even worse than 2007, plus the housing market crash, this plan might need to change. We may have no choice but to stay in this house another 5 years at least. I wouldn't have a problem with this at all if the house was all finished how we would like it for those 5 years......it has the potential to be a beautiful old house!

There is one more twist to this story. When we first got married, I had a couple of credit skeletons in my closet, but I had a good job with good income. My wife was the opposite, great credit but no job (she was in school). So, my Father - in - Law and my wife went on the mortgage. We got an "assumable" mortgage at a rate of 6%. I have made all the payments since day 1, and all on time. Also I have fixed my credit issues and now have a pretty good score. This brings me to my conclusion and my main question:

I would like to work out a deal where my Father-in-Law's name is off of the Mortgage, and my name along with my Wife's is on. I would also like cash to consolidate some debt, buy some furnishings, and finish the rest of the work on the house (Complete landscaping, build laundry room in basement, Paint exterior of house, build patio, etc.). The way I see it, is if I am stuck in my house for 5 more years, or maybe more....I might as well enjoy living there while I do it. What is my best option? Re-fi? Home equity line? Home equity loan? This being my first house, I am not experienced with this stuff. Any tips or information is greatly appreciated. -Thanks.

 

[SouthernCal GN]

Re-fi is the best way to go IMO. Equity products won't change the loan situation for your 1st mortgage, and often have a much higher % rate to deal with.

Refinancing will allow you to remove your inlaws from the loan, put your wife on, and pull some cash out- all under a single note. Your rate may go up, though.

Be smart, and only pull out as much as you need to- not any more.

 

[Grumpy]

Be smart, and only pull out as much as you need to- not any more.

excellent info !!!!! I have an old buddy of mine that wants to move from a condo to a house.. Condo is worth $400k now (although don't know in this market) .. Problem he is goin to face is that they kept on doin re-fi's soooo condo mortgage is prob what the condo is worth ... do things "wisely" :biggrin: just noticed you are from Cleveland!!! He lived there years ago... can't remember the yuppy town they lived in ... damm old age !!

 

[TurboDave]

Re-fi is the best way to go IMO. Equity products won't change the loan situation for your 1st mortgage, and often have a much higher % rate to deal with.

Refinancing will allow you to remove your inlaws from the loan, put your wife on, and pull some cash out- all under a single note. Your rate may go up, though.

Be smart, and only pull out as much as you need to- not any more.

OUTSTANDING advice!!!!!!!!!!!!!!!! on both points. RE-FI and pull out ONLY what you really need.

 

[SouthernCal GN]

Re-read the original post- go to these sites, and pull some comps for your area:

ABCs of Real Estate
Zillow - Real Estate Valuations, Homes for Sale, Free Real Estate Information

enter your address, and you'll be able to get fairly good info about how your neighborhood's value has weathered. Compare that to your current note, and do the math.

 

[rmar]

re-fi

These guy's are correct. Make sure your comps are resent sales.
this will give you a closer actual value. Or find a honest appraiser
for his opinion. It is even worth paying for. All the info you need is a the court house (free)
Re fi is the best of your options. And knowing the real value will keep you
from being upside down in it.

 

[TurboDave]

Re-read the original post- go to these sites, and pull some comps for your area:

.

I'd be REAL carefull pulling comps from those sites. They're way to generic in nature and probably wont reflect the true value.
Do your comps on an apples to apples nature. Look only at comps that are VERY similar to yours, ie. sq ft, acreage, garage space, foundation configuration(basement/crawl/slab) etc.
They gave me a $219,000 comp on mine, however, when comping houses with basements, 4 car garages, and more than 1 acre, the picture changed dramatically!!
Get a good appraisal (that'll tell you how much you can pull out if needed), do your research.

 

[SouthernCal GN]

Agreed- but it's a starting point for him if he doesn't know relative values in his 'hood.