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Construction not fully completed but want to refinance

I would like to refinance our two loans and lock into a 15 to 30 year mortgage.

We have a home equity loan in the amount of $188,000 at a rate of 5%.  We took out a construction loan in the amount of $172,000.  This was converted to secondary loan with an interest rate of 6%.  My wife and I both have credit scores of around 800.

These loans are with two seperate local banks that I also do business with.

We have done most of the rebuilding ourselves and we are down to the last 10% to finish.  We would really like to lock in with one consolidated rate on the combined amount with where rates are right now.

Best guess on our appraised value when complete is somewhere in the high 300s to lower 400s.  Not really any recent comparables where we live.

Will we need to have the home 100% finished to get the appraisal?  Obviously, the goal is to finish the home as quickly as possible, but I am just checking if it is possible to move forward sooner with a refinance.

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January 03 2012 - Virginia
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Answers (8)

lol, sorry, did not see this is over a year old....and now I realize ironranger probably got a lower rate by waiting!
Jim
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May 08 2013
If it really is just trim work and one bathroom, but the toilet and shower are in working order, I see no reason you cannot proceed now. If, by some miscalculation on your part in terms of the amount of work done, or the lender is uptight about the work still to be completed, then you can finish up what needs finished from the appraiser's point of view (or lender's) or explore a longer lock in.
I do tend to agree the rates appear to be fairly level for the next few weeks.
Best wishes, Jim
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May 08 2013
You could possibly start the process now, but your appraisal would be done "subject to" completion of the property.  This will require that the appraiser return to the property for a final inspection.  If you are locking in your rate, you would also need to have the home complete before your rate lock expires and before you can close.  You should check with your local or current lenders on their policy with a home not complete.  Good luck!
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January 04 2012
Thanks for your response.  With so little work remaining, I completely agree with your assessment to wait.  I (and most economists) would put your angst about rising rates aside....they are not going anywhere fast (unless something completely unexpected happens; like a total reversal of the U.S. economy).  Best of luck to you!
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January 04 2012
Profile picture for ironranger1

Lots of trim work, which is probably what every homeowner leaves for last.  I also have one bathroom I need to finish completely.

I think I am just going to wait until everything gets done.  I have been getting a little nervous about rates moving up, plus I am having a heck of time to get someone to finish the bathroom for us.  You would think in this economy it would be much easier to find someone.

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January 04 2012
The only way I know of to get financing prior to the construction being completed is to use the FHA 203K program.  Of course, refinancing immediately may, or may not, make sense.  Rates are not going anywhere fast, so there is no need to rush into anything.  If you have the funds to complete the project and you are doing the work yourself and you will be finished in a few months, I would suggest waiting until the project is done so you can get conventional financing.

If equity is an issue, now or in the future, and you need funds to complete the project; the 203K may be a great solution for you.  My company is headquarted in VA, you can contact them directly through my profile for a referral to a 203K specialist.
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January 03 2012
On 2nd thought, you may be able to get an extended lock like 90 or 120 days and use a subject to appraisal. How long until you will be finished and how in depth is the work to be done?
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January 03 2012
It needs to be complete, what do you have left to do?
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January 03 2012
 
Related Questions
Construction not fully completed but want to refinance
Profile picture for James Ryan
Latest answer by James Ryan
May 08 2013 | 8 answers
  • Asked by ironranger1
  • In Refinance
  • January 03 2012
Mortgage Rates
 
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