Will I qualify for a refi? Steps to take? Help please..

[StillLearning]

I would like to refinance my home and don't know where to start.  I am currently on a three year fixed balloon at 8% that runs out later this year.  My current lender does not report to any credit bureau, and I have been just refi-ing (?) with same terms for the last 8 years.

I would like a 30 year fixed with enough cash out to do $10,000 in home repairs/improvements and $5 - 10,000 to pay off high interest debt.  (credit cards & 1 loan) Home repairs are more important if I couldn't do both.

My scores were around 690-700, but have accumulated high UTI on credit cards, so I'm guessing 650's now.  Huband has a little bad credit, but no good I'm afraid.

House values have plummeted here like everywhere else, but I assume the house is probably worth $55,000 as is and $60ish when improvements (siding/new roof) are finished.  Current mortgage balance is around $33,000.

Debt & current mortgage payments run about 29% of net income.

Is it hopeless?  Suggestions on where to apply?  Should I get an appraisal before doing anything?  thanks!

[ShanetheMortgageMan]

You could do a cash out refinance with FHA's 203b loan, which will go to 85% of the home's appraised value.   You could then choose to use the cash out proceeds however you'd like.  Another route would be FHA's 203k which will use the "after improved" value of your home to base things off of, however your selected contractors need to go through an approval process and they get paid after all improvements are complete and the lender re-inspects.  Using the FHA 203k loan will get you a little more cash out to use however.  Your scores and debt to income ratio appear to be looking fine for either refinance option.  Shouldn't get an appraisal on your own as it'd only be useful to you, for mortgages appraisals have to be ordered independently.

[StillLearning]

Thanks for the help.  One more question though, if you don't mind.  How can I find lenders that do this type of loan? 

[ShanetheMortgageMan]

Any lender that offers FHA will offer 203(b), 203(k)'s are more rare but you can find HUD/FHA approved lenders at http://www.hud.gov/ll/code/llslcrit.cfm