This is a very situation specific question, but I will try to help. Whether to apply for and get a loan before or after refinancing is really a question that depends on your specific situation.

Applying for credit will take a few points off your credit, and the loan itself can also effect your credit. This doesn't mean you shouldn't do it, to give you that advice we need access to your credit report. There are several break points in credit and moving between those break points may have a serious effect, while moving within those break points has no effect. These vary a bit but generally they run 660-679, 680-699, 700-719, 720-739 and 740+. You can use a site like CreditKarma to model a real idea of how it will effect your credit (note your bank will probably use FICO rather than Vantage scoring so it will give you an idea but not an answer).

Now to complicate things even more, a new roof will increase the appraisal. Whether or not you need that increase to get rid of PMI is something you have to figure out.

If it were me, I'd refinance the house and get an extra $6K cash back as part of the deal. Then I would get the roof taken care of. If you do the roof first, I doubt it will make a big enough difference in the appraisal to justify the negative credit effect of getting that small loan first. And if you have that $6K wrapped into the mortgage, you will be paying it off at a lower interest rate than if you took a separate loan.

I disagree that a new roof will affect the appraisal for a mortgage. Though a bad one could reflect deferred maintenance which could affect the overall rating of the property, as compared to others that sold .... which is how an appraised value is determined.

Do you need a certain appraisal number in order to get out from the PMI and the FHA?

Is the only thing that would prevent you from getting to the number needed is the roof? Is it in that bad of shape? If so, get it done and pay off that loan with the refi money.

If not, take some money from the refi and do the roof then if it's really needed..

Hi All! Thanks for the advice and sorry for the delayed response.

So, there is no obvious evidence of damage in the house. There were a few leaks that I've had repaired and some ice damage that caused leakage on the exterior of the house. It is obvious from looking at the roof that patch work was done to repair a couple sections of the roof over the years, but I have seen far worse looking roofs to be fair.

The house needs to be valued at about $290k in order to get out of the PMI and FHA loan. Current valuation estimates on redfin.com are $273 based on area comps and the last listing of the house, which was 2 years ago before I put some work into it. Similar houses in the area are going for $280+ so I think I will come in close without the roof. (think)

After speaking with my mortgage broker at my CU, he suggested waiting for the refinance as taking out the loan now could impact my credit score and may impact debt to income ratio...although he didn't run the numbers so couldn't say for certain if that would be the case. I only have a few months to hold out so I'm going to hunker down and wait...Thankfully we're not getting the same horrible weather we did last year here in the North East so there shouldn't be any additional damage.

What rate are you at currently? The reason I ask is there are several easy and less expensive ways to get out of PMI rather than refinancing.

To be completely honest, I think you are putting all your eggs in a very flimsy basket. I can't see getting several thousand more than comps unless your house is really a lot bigger than the others. In my experience, appraisals come in lower more often than higher. You can do an 80/10/10 and remove the PMI pretty easy and still get the best rate and the $6,000 you need to fix the roof on the HELOC that gets you out of PMI.

If your income and credit are high enough then the roof loan shouldn't matter. Lots of people have loans already out when doing a refi or getting a new home loan (ex-credit card debt, car loans, student debt, etc.). Lenders look at your income and debt, and compare the two. If your #s are super tight then it may be wise to wait on the roof.

Last year I went through the same dealio - I was locked in on a 30 year loan, FHA, with a locked rate of 4.5%... Not terrible but not great, oh and I was paying PMI - big rip off (you can't write PMI off)... Anyway, I was very nervous about my house not appraising high enough to eliminate PMI. Regular lenders require 20% equity to forgo PMI.. But my local credit union only requires 10%, meaning I could take a loan up to 90% value without paying PMI (and they had the same rates as the other lenders). I went forward and my house ended up appraising MUCH higher than I thought. It's almost like these people wanted the loan (since the credit union was funding it). I was hoping my house would appraise at 275k (highest house in my neighborhood sold for 280k) - appraisal came back at 301k - so no problem getting loan. And yes, I know my house wouldn't really sell for 301 in today's market but I was happy I didn't have any issues getting the loan.

I ended up going to a 20 year, 3.750% fixed... shaved 6 years off (compared to my previous 30 year loan) and my payment only went up $55. I was happy happy!!!

I'm in Missouri, and my old loan stated by law, the PMI was to drop off after so many years... You can fight the PMI now, but you'd have to get the appraisal on your own, then jump through a bunch of hoops to get your current lender to remove PMI - I would guess it's pretty tough, especially if you're already worried about the appraisal.