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Refinance vacation home in Lakes Region

We are currently making $75k worth of improvements to our vacation home in a beautiful Lake Winnipesaukee community.  The work will be completed in two months.  We would like to refinance for $300K. Current town appraisal is $386K. Should we wait until the work is completed to start the process?  Thanks
  • February 10 2009 - Boston
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Answers (1)

Very difficult to borrow "while construction" is commencing.  2 reasons:  Clarity of title or deed if there is a contractor (potential liens until paid in full, clouding title  making the new mortgage "2nd fiddle" to the contractor because filed after...)  2) It's hard to give a "subject to" value when the work is not completed.. Appraisers can do it, but subject to means finish the work, then close OR a construction-perm type loan.  The CPerm loan  should be done PRIOR to the contractor showing up....  Dog chasing tail theory.  If work has started.... Finish and then pull money back out.  If not started.. Borrow now off the as/is and you will have less hassles.  Good Luck and keep rockin'.
  • February 10 2009
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