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We Are Considering Putting An Addition On Our Home. Can You Get A Loan Greater Than Your Homes Appraisal Valu
Author: Rob // Category: Q&Awe have about $18,000 in available equity. The addition is likely to exceed that amount. Do you know if a mortgage company will lend you more than your home is appraised at for an addition since the value of the home will increase when the addition is complete?
Tags: Addition, Appraisal, Considering, Greater, Home, Homes, Loan, Putting, Than, Your
February 10th, 2010 at 6:48 pm
No, you are not likely to get more then 80% of the equity or so. Not many banks will agree to 100% with the present dropping of values, and none will mortgage on supposed future appraisals.
February 11th, 2010 at 12:16 am
You would get a construction loan. They will appraise the property for what it will be worth after improvements. The difference between that amount and your current balance on your mortgage will be what they will lend you. Speak to a good mortgage professional.
February 11th, 2010 at 12:47 am
You would refinance your loan with the costs of the addition as construction. You would get “draws” from the additional monies thru the bank and they would inspect periodically to ensure the money is being used for the addition. You would also have to pass your county or city inspection codes and have a county/city inspector sign off on the addition. It is done all of the time and would add value to your house. Just make sure you get a reputable contractor doing the work at a fair and reasonable price.
February 11th, 2010 at 4:54 am
Yes they will if the new value is going to be above the loan amount. One option is a construction/rehab loan. they will allow you to borrow the money in the short term based on approved plans, and set the loan in the future based on the new home.
February 11th, 2010 at 9:19 am
No lender will give you more than the house is worth based on a promised improvement.
February 11th, 2010 at 9:49 am
With the mortgage crisis – most lenders will not give up to 100% equity – much less more than the homes value.
February 11th, 2010 at 4:25 pm
no