I believe you should start with your Realtor. Just like when we pulled up the details about the properties that had recently sold, when you purchased your home, we can do the same thing again. Your lender is going to hire an appraiser and charge you several hundred dollars for a detailed appraisal. Your Realtor
with be able to give you a good price range, at no cost to you.
If you just want to refinance, to take advantage of a lower interest rate, you will need the comparable sales values to equal the amount you owe on your mortgage. For a quick example, if you owe $300,000 on your house and your neighborhood sale prices are $300,000 to $350,000. You should be ok to
refinance your loan and take advantage of a lower interest rate.
If you want to take some of your equity out of the house, you will need the comparable sales values to equal the amount of your mortgage, plus 20% of your mortgage, plus the amount that you want to take out. An example of this might be, if you owe $300,000 on your house and the neighborhood sales prices are $400,000 to $425,000. Again, you should be ok to refinance your loan and take some of the equity out of your house. In this example, the lender will probably want you to keep 20% equity or $60,000 but anything above the $360,000 you could cash out. Warning: I don’t believe taking equity out of your house is a good idea.
I meet with homeowners all the time, and almost every single one of them doesn’t even remember what they did with all of the money, and they are still paying on the loan! The equity you build in your current home is going to help you get to your next home.
Remember, every situation is unique. This is a general answer. Your lender will be able to give you more specific details for you.