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Hello,
I am looking to get a cash out equity loan to fund a project.
Total needed cash $120,000.
Available $40,000 cash in savings Need $80,000 more.
Mortgage Balance $170,000 With Appraised Value of $285,000.
Some questions.
Are there reasonable options to take a fixed LOC for 90% LTV?
Are there any cash out refinance for 90% LTV?
I want to go conventional not FHA.
If I take out a LTV LOC at 90% would I have to pay PMI on the original note and the LOC?
DTI would be 33-36 % depending on the route I went, Credit scores are good.
Thanks, BDR
conventional cash out guidelines restrict your cash out to 80% LTV.
FHA allows you to go to 85% which might help you get what you need if your "project" increases the appraised value of your home.
A HELOC from a local credit union might be more liberal in the valuation of your home.
Another question what is Maximum FRONT END DTI, to go conventional?
I would be right around 28-32% Total DTI 33-37%
This project is directly related to increasing the value of my house. After I figure out the funding my equity will be way more than 20% and I could again refinance conventional mortgage after the project is complete....
I think if you notify your lender of the project estimate--assuming you are using a licensed contractor to complete the work you'll likely receive a higher appraised value which may allow you to avoid needing to refinance again in the future.
If you plan on doing the work yourself (dyi project) then simply purchase/finance the materials, do the work and then payoff the materials invoice (or perhaps even the contractor) once the project is complete with the loan proceeds.