I purchased a duplex a bit more than 3 years ago and have spent a good amount of time renovating the unit I’ve been living in while renting out the other. Without getting into specifics, the local market has done well and I expect the value of this house has appreciated in the ballpark of 30-50% since it was purchased. Considering the updates made to my unit, I’m interested in refinancing my mortgage for a few reasons:
- Get rid of the PMI. Loan balance is currently right at about 5% and I’m confident a “fair” evaluation would bring me well above the 20% marker.
- Change the mortgage terms from a 30-year to a 15-year
- Lower the interest rate. Even if I refi-ed to a “regular” 30-year, I’d still probably be able to shave down my APR by 0.5%
- Include a streamlined 203k in the new mortgage to cover upcoming renovation costs of around 15-25k (bathroom gut & remodel). I could/would do most this work myself, but it’s in the tenant-occupied unit and is going to be a big, long overdue project. I have my tenant’s blessing to move forward and am electing to go this route so as to minimize the amount of time the unit is in a state of construction.
My biggest concern is the current state of “my” unit; I’m in a situation where most of the work is 95% done, but there are still a few linear feet of baseboards to lay down (and prime & paint), some small nooks where drywall could be patched/painted, a couple of thresholds need to be placed down, one of the closets needs the clothing pole & shelf put back in, etc. No exposed studs or anything on that level. Essentially, there’s a somewhat lengthly but manageable list of cosmetic details which still need to be finalized before I’d want to start showing it to a prospective tenant.
That said, I wanted to know if anyone might have some insight as to what kinds of things an appraiser might ding me for or even just raise a brow. I’ve gone through a few of the posts here regarding appraisals, but basically, I want to know if there’s a written/spoken list of items you always want to make sure are done before an appraisal. Other unit is fine and currently has a tenant. Rest of the house, including the outside is presentable. I’m confident this place should appraise well enough even in its current state, but I’m wondering where I should focus my efforts in order to maximize the potential value of an appraisal.
If there’s any general advice, I’m also wide open to hearing it or about any similar experiences you’ve had dealing with this sort of a situation. Thanks in advance for your help!!
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