I am looking at a loan for $75,000 where the funds were used to payoff the existing mortgage ($50,000) and do some remodeling ($25,000). I know the pecking order is:
1. Purchase
2. Cash-out refinancing
3. Refinancing
4. Home Improvement
5. Other
My question here is this has elements of 2, 3 and 4. They are "refinancing" their home and taking "cash-out" to do "home improvements". Is this considered a Cash-Out Refinance or just a Refinance?
Also, it appears that the only time you would have a home improvement loan is when there is not an existing mortgage being refinanced so we likely won't see many at all, correct??
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