LTV will be based on the value after the work is done. So assuming right now you are at 100% ltv of say...150K home. Then you put 15K into the home for the remodel. Say it then adds 20K in value (133% return on investment which is totally unheard of). That would mean that you now owe 165K on a 170K home. That leaves you at 97% LTV.
Do you already have etimates for adding the room and bathroom. 15K seems really low and you do not want to lowball something like this. If it is a new bathroom and all plumbing has to be run, the plumbing alone should be in the 5K or more range, yet alone all of the finishing in the bathroom and the new bedroom. You also will have to have all new electric work done and all permits, etc. When doing this type of loan, there are no real shortcuts to minimize costs as they want to make sure the work is done correct, fast, to all codes, and will give the needed return for the LTV. Unless you are a licensed GC, all work will have to p=be done by professionals and will costs a bit.
BTW, not trying to questions your judgement in any way, I am just wondering if those numbers are hard numbers or a figure you came up with. I am sure that where I live things are a bit more expensive. But where I live, the basic plumbing and electric work would run me close to that 15 grand, yet alone drywall, texture, paint, trim, windows/doors, and bathroom fixtures, etc..
The value of the property is based on the after repair value and the cost of the 203k can be rolled into the refinance, as well as the soft cost in the loan. But your 1st idea about a tite 1 is much lease expensive and time consuming.
I'm looking into one of these loans. The idea of having to have all the bids up front and know exactly what we are doing seemed overwelming. Was there any wiggle room when doing these. What if we go to do something and find mold or some other issue that wasn't orginally in the bid. Has anyone finished remodeling with one of these that could explain the process better. I just don't want to be sitting there with no money if anything comes up and no be able to finish the remodel. O.o
I know this an old thread but I am writing this for anyone who finds this through a google search like I did: FHA Title 1 and FHA 203k are 2 different loan programs. Admirals Bank offers the Title 1 loan, as of this posting.