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Updated over 5 years ago,

User Stats

53
Posts
18
Votes
Hunter L.
  • Investor
  • McLean, VA
18
Votes |
53
Posts

Owner-Occupied Re-Financing Question

Hunter L.
  • Investor
  • McLean, VA
Posted

Let me preface this by saying I've never refinanced an owner-occupied single family home.

I was considering putting an offer in on a condo being at around $200K. I was looking to use a 3% down loan to get into the property and fix it up. These were what the numbers looked like:

Purchase $200K

Rehab $14K (cosmetic)

ARV $270K


In discussions with my lender about how to get rid of the PMI as quickly as possible, I asked him about refinancing after I had restored the property to neighborhood standards and its value had risen to the level of the comps in the neighborhood. He said that it was not likely that the appraiser would consider the renovations to have much value, as they were only cosmetic, even though the sales comps in the neighborhood on similar units (same bed/bath, sq ft) supported the $270K ARV.

That surprised me as I thought the appraiser would just be using the sales comps in the neighborhood to determine the fair market value, not my acquisition costs and the cost of my renovations. Has anyone run across this situation?

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