I am buying a house right now and I also need to do some renovations. I'm weighing all my options here and my 1st mortgage will only give me 80% of purchase price/appraisal (lesser of). I'm fairly sure my appraisal will be more than purchase price so that isn't the issue.
My issue is in the renovations. I'm looking at investing $80k-$100k in renovations and do not have the cash to do this. This will be a priority and we will not move into the home until the renovations are done.
here are the options I'm currently considering...How should I structure this? or variations of this:
1)
-buy no points on my 1st mortgage, get a 4.35% 30 year fixed
-take out $80k-$100k in a HELOC (needs to be obtained through another credit union and avoids PMI)...i think rate is near 4%
-when the work is done (3-4 months after close of sale), refi- with points at lowest rate available.
2)
-buy no points on my 1st mortgage, get a 4.35% 30 year fixed
-take out $80k-$100k in a 20-year HE LOAN currently at 6.5% (needs to be obtained through another credit union and avoids PMI)
-when the work is done (3-4 months after close of sale), refi- with points at lowest rate available.
-if for some reason the rates skyrocket, I'll just sit locked in at the 4.35% and 6.5%
3)
-buy 2 pts on my 1st and get a 30 year fixed at 3.875%
-take out $80k-$100k in a 20-year HE LOAN currently at 6.5% (needs to be obtained through another credit union and avoids PMI)
-do not refi, I'll just sit locked in at the 3.85% and 6.5%....while hoping to accelerate HE Loan pmts to pay within 20 years
4)
-buy 2 pts on my 1st and get a 30 year fixed at 3.875%
-take out $80k-$100k in a HELOC (needs to be obtained through another credit union and avoids PMI) I think rate is near 4%
-do not refi, I'll just sit locked in at the 3.85% and 4%....while hoping to accelerate HELOC pmts to pay within 20 years
also, i can probably subsidize $20k or so of the HELOC/HE LOAN costs especially if I end up not able to refi 6 months down the road.
I think a lot is dependent on if I think interest rates are going to go up soon (I do not think that) and if I want to pay 3 sets of closing costs (I think credit unions reimburse closing costs if you keep the HE open for a year or two).
looking for other options out there as well if any.....i went through a FHA constrution loan the fees alone are near $20k so I just stopped looking at that route.
My issue is in the renovations. I'm looking at investing $80k-$100k in renovations and do not have the cash to do this. This will be a priority and we will not move into the home until the renovations are done.
here are the options I'm currently considering...How should I structure this? or variations of this:
1)
-buy no points on my 1st mortgage, get a 4.35% 30 year fixed
-take out $80k-$100k in a HELOC (needs to be obtained through another credit union and avoids PMI)...i think rate is near 4%
-when the work is done (3-4 months after close of sale), refi- with points at lowest rate available.
2)
-buy no points on my 1st mortgage, get a 4.35% 30 year fixed
-take out $80k-$100k in a 20-year HE LOAN currently at 6.5% (needs to be obtained through another credit union and avoids PMI)
-when the work is done (3-4 months after close of sale), refi- with points at lowest rate available.
-if for some reason the rates skyrocket, I'll just sit locked in at the 4.35% and 6.5%
3)
-buy 2 pts on my 1st and get a 30 year fixed at 3.875%
-take out $80k-$100k in a 20-year HE LOAN currently at 6.5% (needs to be obtained through another credit union and avoids PMI)
-do not refi, I'll just sit locked in at the 3.85% and 6.5%....while hoping to accelerate HE Loan pmts to pay within 20 years
4)
-buy 2 pts on my 1st and get a 30 year fixed at 3.875%
-take out $80k-$100k in a HELOC (needs to be obtained through another credit union and avoids PMI) I think rate is near 4%
-do not refi, I'll just sit locked in at the 3.85% and 4%....while hoping to accelerate HELOC pmts to pay within 20 years
also, i can probably subsidize $20k or so of the HELOC/HE LOAN costs especially if I end up not able to refi 6 months down the road.
I think a lot is dependent on if I think interest rates are going to go up soon (I do not think that) and if I want to pay 3 sets of closing costs (I think credit unions reimburse closing costs if you keep the HE open for a year or two).
looking for other options out there as well if any.....i went through a FHA constrution loan the fees alone are near $20k so I just stopped looking at that route.