Help me decide how to go forward... refi + cash out

[edselpdx]

I currently have a 30 yr fixed (25 yrs left) at 5.1% for approx 130K and a 10 yr fixed (officially 7 yrs left, but will be paid in 1.5 yrs) at 7.1% with a 7K balance (of 20K 3 yrs ago) for a bath remodel. Income is fine for $250K-300K mortgage, officially, although I would not go that high ever. FICO (EQ via Scorewatch) is currently at 762 (down from >800 a yr ago, but headed back up.) Haven't checked the others, but there aren't any surprises out there. Currently my FICO is down because I financed a tankless water heater install on a credit card which I sent 100% payment for yesterday. Not a huge amount of short-term savings, but more than most--at least 3 months' worth. I do have significant retirement savings or IRA and 403b, but I don't want to touch that. No other debt (no car payment, no student loans, no CC balances, 50K of available CC credit soon to be at 0-2% utilization.)

My current house is a 3BD/1BA worth about $300K given the current market, but has only one bathroom as is. I have a teenaged daughter, and am desperate for a 2nd bathroom (yesterday, if possible). I love my location (older close in Portland OR neighborhood), and love my home otherwise. Remodeling the basement seems to be the way to go, as dormering the upstairs gets into remodeling the existing stairs, etc. I could add a craft/multipurpose room, a family room with closet + egress (so could be a master BR suite to a future buyer), and a much-needed 2nd bath for approx $50-60K to match current finishes in the home and address a couple of other issues, and would add 700ft2 of legal permitted living space to my 1300 ft2 home by doing this.

Is it humanly possible to get a cash out 15 yr fixed loan in this situation and the current environment? I'd like to consolidate both mortgages PLUS cash out for the remodel into one 15 yr fixed mortgage, to minimize long-term costs and in-retirement mortgages.  Current mortgage has been sold a billion times, but currently owned by BofA and in excellent standing (never late in 12 yrs, paying 2nd well aheaad of schedule).

Any suggestions where to start? I refinanced after a divorce 5 yrs ago and into the 30yr fixed. I hate shopping for this stuff. I do have a small CU available to me, but am unsure how competitive they are on rates these days.

[BrianB_The_Loan_Professor]

You have a lot going for you to get this done

Great credit and low loan to value

The more you borrow the higher the risk to the bank so you might start to see some added costs/higher rate as you get closer to the value of the home

if you stay at or below 70% it will be around 1/4 point and if you stay less than 60% there shouldnt be any adjustment to the rate

Right now you should be able to get a no point loan in the 4.5% range and if you choose to buy it down you can even go lower

Not that hard to get done if you are a solid borrower - which it sounds like you are

if you had spotty credit or high loan to value cash out can be a nightmare

Good Luck

B

[Anonymous]

Ed, I'm still laughing from the bathroom / teenage daughter quip.  I used to coach high school girls soccer.  A long road trip to a place with two port-o-pots almost left us unable to kick off on time. And that was 30 minutes after we got there. 

15 Year at no points, even at that 70LTV is @ 4.25%.   A discount point pushes that rate to 4%. 

That said, rates are also back to their 2010 lows that they saw in February and March, right before jumping up .375-.5% overnight.  You sound like you have the credit, income, and equity.  4% money is pretty good.

[edselpdx]

Thanks. I guess I'll talk to someone at my CU to start with.

edsel