BakersDozen Posted December 29, 2011 Share Posted December 29, 2011 I really, REALLY want an addition on our house. Our house has the potential to double in size the little girls' room and add a 3/4 bath off of that room. Sigh...a third toilet! Can you imagine??? My fil and bil are both master carpenters and both have offered to come help with the addition, saving us thousands! We estimate that it would cost 25K or less to do this which is far better than purchasing a different home for 60K+ more than we owe on our current house. The problem is my dh says if we refinance we will not be allowed to borrow $ above what we currently owe. Is this correct? Or is he just finding any excuse to not go forward with the addition? :glare: I really want another toilet in my house, can you tell? :D Quote Link to comment Share on other sites More sharing options...
LMA Posted December 29, 2011 Share Posted December 29, 2011 Additions on houses are usually financed with a line of credit. Depending on how much equity you have in your house, you can apply with any bank for a Home Equity Line of Credit (HELOC). They are fairly easy to get and many do not have closing costs or appraisals because they are secondary to your primary mortgage. There are other restrictions usually from a bank such as you need a special checking account from which to pay for the line of credit. The line of credit is based on the amount of equity in your house. My bank is always asking me to get a line of credit when I go in so you could probably start with your bank. It will put a lien on your house. Quote Link to comment Share on other sites More sharing options...
black_midori Posted December 30, 2011 Share Posted December 30, 2011 If you refinance and don't have paid in the 20% of value, they probably won't let you borrow over. If you do have that paid in (thereby having large amounts of home equity) then you can get money out! Quote Link to comment Share on other sites More sharing options...
StaceyinLA Posted December 30, 2011 Share Posted December 30, 2011 If you owe less than your house is worth (and less than the max percentage that can be borrowed on the value), you can most certainly refi and take cash out. Just beware that even if they'll let you go over 80% of the value, you might want to see what your PMI will cost - it can jack up your note. If that were the case, you might just want to do a second mortgage. If you have potential to lower your interest rate though, you could still refi the first and lower that pmt, then do a second, or a line of credit, for your addition. Quote Link to comment Share on other sites More sharing options...
milovany Posted December 30, 2011 Share Posted December 30, 2011 (edited) Are you in a rural area at all? We're in a housing development between town and country and are considered "rural," so it's not just out in the country with acreage and animals that's "rural". Anyway, a different way you might be able to finance an addition is through the U.S. Department of Agriculture's Rural Development Division. There are regulations of course, but it might be worth checking out, but you can get a $20,000 Repair and Rehabilitation loan for 20 years at 1% interest. Edited December 30, 2011 by milovaný Quote Link to comment Share on other sites More sharing options...
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