Refinancing mortgage to add in debt to loan...

[Trey]

We recently bought a home (meaning only three months ago) and we have upgraded the house quite a bit already (paint, new kitchen, new floors, flipped a bathroom, new carpets, etc.) and we are wondering if we can get a current appraisal on our home, and if it's greater than our current loan, can we refinance our loan to add in our previous debt and get a better rate? We have been paying down our debt greatly over the last few years (and no longer use credit cards), but consolidating it into our loan would be an ideal situation for us to finally finish paying it off and we are wondering if this is possible. Our loan was started through USAA and is now in the possession of US Bank.

Thanks!!!
Trey

[amazinggrace]

Yes, you can.

They may want you to wait for the 6 month mark though.

[Shaky]

Most likely you have to wait to refinance, not sure how long it is now but I think it was a year before.
I'm not sure how much you have in debts but keep in mind that you will have lower rate but if you add it to your HEL (home equity loan) you will be paying that probably longer than what you would now.
Suzze Orman always say not to add regular debts to your home cause in case of the worse they wont take your house if you stop paying the debts but if you stop paying the home equity loan you can lose your home. Just something to think about.

[Daydreamer]

I was actually wonering about refinancing too, simply because the rates are so much lower now and just the rate difference could save us a couple hundred a month. I'd love to hear the answer to this if you find out. We have also upgraded our house a lot too (new floors, complete pool remodel, paint, we are re-modeling the bathrooms) but with property values still going down so much, i dont even know if it would appraise for what we bought it at.

[Trey]

for Mr. Rich.

[gunsgirl]

yes you can- say for instance you current loan balance is 150,000, you have spent 50,000 dollars in upgrades and remodeling your home- you have it appraised and it indeed appraises for 200,000 you can then get the loan for 200,000 and pay off the all the other loans ( as long as you do not use the VA)

BUT there is a good chance that your home is worth less than what you paid for it-
there fore making the appraisal less and the loan amount less-

this recently happened to my friend- he house appraised in dec 2007 for 245,000 dollars
she added a 60,000 dollar pool ( with the intent of having it appraised again and then combining and paying off the pool loan) thinking that he home and pool would appraise for over 300,000, when the appaiser came out the following April - appraised the whole thing at 237,900 they are now paying thier reg mortgage at 6% + the pool loan at 7.5% a month. she was a stay at home mom- and she is now working full time .

[Trey]

Originally Posted by gunsgirl yes you can- say for instance you current loan balance is 150,000, you have spent 50,000 dollars in upgrades and remodeling your home- you have it appraised and it indeed appraises for 200,000 you can then get the loan for 200,000 and pay off the all the other loans ( as long as you do not use the VA) BUT there is a good chance that your home is worth less than what you paid for it- there fore making the appraisal less and the loan amount less- this recently happened to my friend- he house appraised in dec 2007 for 245,000 dollars she added a 60,000 dollar pool ( with the intent of having it appraised again and then combining and paying off the pool loan) thinking that he home and pool would appraise for over 300,000, when the appaiser came out the following April - appraised the whole thing at 237,900 they are now paying thier reg mortgage at 6% + the pool loan at 7.5% a month. she was a stay at home mom- and she is now working full time .

Thanks. I have actually heard that a pool is not the best upgrade for a home too, since there is a lot of money and maintenance involved and only specific buyers are looking for that. I wonder if that's why? I do know that our home's value is probably down 10-15K due to the economy (we only bought it a few months ago), but the only upgrades we have done are ones that will increase the value. I basically just want to know if there is a time limit for this? Like if it got appraised right now for more than we paid, could we do it right now, even though we have only owned the home for a few months?

Also, the rates have dropped quite a bit so the closing costs associated with refinancing would pay itself off quickly just in those savings.

What did you mean about the VA? There is a stipulation with that? That's the loan we have...

[Theresa]

I've heard that housing prices are supposed to bottom out by the end of the year. Not sure if it's worth waiting on an appraisal when things hopefully pick back up?

[SWOsgirlSanDiego]

Never mind