Hi Michael,Would you be opposed to refinancing all the rentals out of your name and into commercial loans? 

Our realtor estimated that after the work it should be appraised for around $190k, in which case we plan on refinancing so that we can put the money from the heloc into our regular monthly mortgage and free up her heloc since she does real estate investing as well.Now the house is divided into two sections.

This is our first time and I would like to know which commercial lenders are best for refinancing.

And did you you a small local bank for your loan and refinancing?

This would give a definite buyer in the contractor who would now have "skin" in the game for refinancing from a bank.

This would give a definite buyer in the contractor who would now have "skin" in the game for refinancing from a bank.

Yes, in the example numbers you provided once you refinanced the house you would have a brand new mortgage in the amount of $72,000. 

Thanks for the quick feedback,Refinancing would save about 60k over the life of the new loan compared to the old load with the PMI, I also spoke with my current lender and there isn't much they can help with as far as the current loan other then refinancing, there rate seems high compared to a few others i talked too, so i will definitely shop around a bit. my next question i guess would pertain to these seemingly scam like letters i get and ads that pop up that go something like " under president obama you can refinance out of your current loan and cost you nothing if you owe less than 679,000" obviously nothing is free but are there programs like this?

Refinancing usually costs 2-3k in closing costs

@Michael WoodsI just refinanced out of my VA a few months ago into a Conventional 30-year fixed.