We started a DIY remodel and so far have turned a 4 bedroom/2.5 bath into a one bedroom/1 bath. Have been told that the house can not be appraised now. Bought house for $432K and have a 1st and 2nd for the about amount. Interest only loans (1st 342K at 5,5%, 2nd $85K equity loan at about 4% now). Comparable houses (that is when we have a functioning house) in the neighborhood are selling for $475K - $800K; typical is between $525-$575. To give you idea of land value, the $800K was scrape and rebuild. Monthly combined gross income, $8,600 plus annual bonus $10K. Other credit card debt of $10K. Have completed, signed structural drawing, construction plans, and three competitive bids to do work that range from $80K - $120K.

We have made several attempts to refinance as well as tried to get a get construction loans. Looking for any other suggestions to get out of this mess. We can live in a unfinished home, but I would hate missing this oppotunity to get our loan restructered into something fixed.

Thanks for the suggestions in advance - Kolorado

You will not qualify for any Conventional or most likely FHA financing on an unfinished remodel in the current credit market.

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While it may be risky, you could always consider financing the continued work on the property through other unsecured means (credit cards) and upon completion seek to refinance to pay these off. Understand that the maimum amount of the final appraised value that you could use to pay down this debt would be 90%.

This would solve your appraisal issue if you could get the house done that way, the biggest concern then is will the house appraise high enough upon completion to allow for consolidation of the two mortgages and the additional debt incurred.

If it would be possible to get approved for a new mortgage on your own I would consider trying to keep the unsecured debt in your wife's name as to not adversely effect your score and ability to refi upon completion.

Just one outside of the box possibility...

Good Luck,

Jason

Doubtful. Conservatively, they're at 82+% as it stands...adding another 80-100K (debt  for completion) in  this market won't work, period. 

Live in it as is for another 2 years, maybe 3. Then try to finance. SAVE YOUR $$.

Kolorado-

We can give it a shot. A lot of guideline changes have occured with a couple different lenders and I could check this scenario out for you.

-Eni

LMB#100030320

Don't waste your time.  It won't go.