Cash-out refis tougher to get

Alternatives available for financing property

 improvements

By Ilyce Glink, Tuesday, April 7, 2009. Inman NewsQ: I am considering refinancing my mortgage and I also want to make some upgrades to our home. Can I refinance and borrow money for upgrades under the same refinancing loan?A: What you're proposing is called a cash-out refinance and it's tough to get one right now. They're expensive, and lenders typically won't do them unless you have tons of equity in your property. If your property is worth just about what you owe, you probably won't qualify for a cash-out refinance, even if the loan will improve the value of your home. Some loan products are harder to get in today's financial markets than they were in the past. Frequently, I tell people that a certain type of loan product is hard to get and then I get follow up e-mails from loan brokers telling me that they have the ability to get these loan products for homeowners. So while it may be harder for you to find what had been an easy loan to obtain in the past, you may find a lender that is willing to give you the type of loan you are looking for. You need to make sure you understand the costs involved. Some loan products now cost much more than they did before the 2008 financial crisis. The cost to refinance, for example, has also risen dramatically. Your credit score, the amount you want to borrow, and the type of property you own all may affect the pricing for the loan product you want.In shopping around for your loan, make sure you talk to a good mortgage broker, local community bank, credit union and even a national lender to compare loan products and the costs involved. One product that might be available to you is the FHA 203(k) program or a construction loan (if the work you want to do is major). The FHA 203(k) program was set up to assist people who were buying a property and wanted to make improvement to the home. If you, the home you're in and the improvements you're intending to make to the home are within the parameters of the FHA loan program, you may be in luck.Otherwise, if the work isn't too major, you may want to look out for a zero-percent financing offer or low-interest-rate offer from Home Depot or Lowe's. You might be able to get up to a $30,000 line of credit on one of their credit cards for supplies, equipment or home improvement services you purchase from them. Understand what it will cost you to take out that type of credit line and have a backup plan in place to pay down the amount you owe on that credit card once the free or low-interest payment period ends. You won't want to be stuck with a $30,000 credit-card loan at a high interest rate without knowing having a plan in place to pay it off.Q: When we made the offer on a house, it had a new pellet stove. The sellers said that they were taking it with them. We said that it is attached and that we wanted it. Their real estate agent said that the stove was excluded in the listing. When we went for the final walkthrough, the stove was not in the house. Do we have any rights as buyers?A: It depends on what your purchase and sale agreement provides. If your agreement provides for the stove to be conveyed to you as part of the purchase of the home, you have a right to object and not close on the purchase until the situation is resolved. While you clearly stated that you thought the stove was part of the house, there was a verbal disagreement with the sellers as to whether that appliance was included. While the listing agreement may have excluded the stove, you need to see what you and the seller agreed to in the purchase and sale agreement. Did the purchase contract exclude the stove? If the listing sheet specifically excluded the stove or if the contract specifically excludes the stove, you may be out of luck. If there is nothing in the purchase and sale agreement relating to the stove, you may have a better negotiating position depending on the laws in the state in which the home is located.You may wish to consult with an attorney about your situation. I'm not a real estate attorney, but my understanding is that the seller is entitled to remove his personal property from the home, but generally fixtures of the home must remain. To avoid ambiguity, some purchase and sale agreements specifically state that the heating and cooling systems of the home are fixtures that must remain in the home after closing. Some contracts go so far as to provide that plantings in the garden are considered part of the home and must remain.In some parts of the country the custom is for some items of personal property to remain with the home. These items include the refrigerator, stove, dishwasher and ovens. In other parts of the country, these items are commonly removed by the seller when they leave. If the home you're buying has a heating system and the pellet stove was not the primary source of heat for the home, the pellet stove could be considered an item of personal property that the seller could have removed.You need to determine what your contract stated and whether the seller had the right to remove the stove. If they didn't have the right to remove the stove, you have the right to request that they pay for the installation of another pellet stove. However, if the contract allowed the removal, you'll have to accept that the sellers were within their rights to take it.