Cash out at refinance - Posted by Jamaul Jones

Posted by karp on December 06, 1998 at 06:27:00:

You can refi immediately after the house is fixed up. Since it is a rental, you will not get as high an LTV as you would if it was owner occupied. Other factors affecting how much cash you can pull are : What kind of interest you want to pay, what your credit is like, etc…

Just find a good broker and start the process NOW before you are done with the fix up so you can know what to expect…

Good Luck,

Karl Hartley

Cash out at refinance - Posted by Jamaul Jones

Posted by Jamaul Jones on December 06, 1998 at 24:14:36:

I sent a letter to the owner of a home that had been tagged as a dangerous building by the city. The owner called me and said that he was interested in selling. The owner wanted to receive $5000. He had to split it with his ex-wife.

The home has a private first mortgage for $12,000 which hasn’t been paid since April 1998. $9000.00 in back property taxes. $1000 in fees for city utilities.

This would be a total of $27,000 for a house worth $60,000 after the $12,000 in repairs.

I was able to contact the mortgage holder, who was an elderely person who didn’t have the money to foreclose and fix up the property. After explaining the condition of the house, I offered the mortgage holder $5000. The mortgage holder said yes to this amount.

I told the seller I could only pay him $3000 and he said yes.

Now I am purchasing a $60,000 house for $18,000.

The house needs $12,000 in repairs. I am financing the deal with a California bank. I am having to put up a total of $5000 of my own money. This includes down payment and points/closing costs. The bank is financing the remaining acquisition costs and repair costs. The loan is interest only 11% due in one year.

I am able to rent the house for $650 per month. I am scheduled to close in about a week.

My question: After the house is fixed up, I want to refinance it with a convention 30 year loan. I want to pull out as much cash on the refi as I can. How long do I have to wait to refi the house? What is the maximum LTV I will be able to pull out in cash.

Re: Cash out at refinance - Posted by Paul Macdonald

Posted by Paul Macdonald on December 06, 1998 at 17:07:58:

If you are bucking for a Fannie/Freddie deal you can get a cash out (depending on credit, etc.) on appraised value up to 65% LTV immediately after settlement.

Up to about 75% for non-conforming lenders, and after one year seasoning 75% to 90%.

Good Hunting

Paul Macdonald

Re: Cash out at refinance - Posted by Erin

Posted by Erin on December 06, 1998 at 07:48:46:

You really should speak to your lender about your plans before you execute the loan!

You mentioned that once complete, you wanted to refinance on a conventional loan. For a conventional loan, you must wait 1 year to refinance if you wish the loan to be based on the appraised value. There are non-conforming loan products that will allow you to refinance in less that 12 months time with the appraised value; however, most no seasoning refi’s will base the loan on your purchase price.

As far as LTV is concerned, it is possible to obtain up to 90% for investment properties. Because I don’t know the details, I would plan on 75%.