So we have had our home for a little over a year. Purchased it for $220k, owe about $210k. Local appraisals have our house going for around $290k in this market and so we have thought about doing a cash out refi and take advantage of the equity, do a few home improvements (generator, roof, back porch addition) and also pay off some credit cards and refinance our truck and put about $20k down to get that payment down as well. All in all, we figure we can lower our current rate from 3.125 to 2.75 on the new note and end up saving around $1300 total in bills.

If we want to do this, what is the best way about going about it? Do we just decide on a lender and just call them up or are there things we need to get in order prior to that? Also, I know this market it pretty nuts right now, but would a $70k loan on the equity be something that could be done? And does it have to be a cash refinance or are there other types of home equity loans that might be better suited?

Not in mortgage but if you are in Texas I'm pretty sure you are limited to 80% of appraised value on a cash out refinance. Not sure if that applies to other states. Also the rate on a 30 year cash out will tend to be at least .25 higher than a traditional purchase rate quote. I'm sure Steve Or Jay will chime in and give you a definitive answer.

JP is correct. Texas you are limited to 80% max due to state law supersedes VA rules. Other states I don't know. If you just want to get a better rate it would be around 2.25 but I have to check market.

If your $290K number is right you could go to $232K. That increases your loan by $22K but you pay closing costs. You won't net $22K. HELOC has no closing costs unless you need an appraisal so your net is greater.