Can I use a personal loan for a down payment and refinance?

Question

Todd Dexheimer · Answer

Call different lenders. If the deal is good enough you should be able to get a 20% down loan. Worst case 25% down. Negotiate on fees as well. Lenders will typically try to get 1%, but push them to get down to .5%.

Upen Patel · Answer

@Jess F. To answer you question, you can't use funds from an unsecured loan (which is what a personal loan is) towards any part of the loan - down payment or closing cost. Down payment of an Fannie/Freddie 1-4 unit is 25%, so if the lender told you anything else then they lied to hook you in.

Michael Cohen · Answer

rate/term (i.e. no cash out) are typically 95% LTV, but truth-be-told, I don't quite understand what you're asking.

I will say that down payment on a traditional mortgage (i.e. conventional loan) cannot be a loan. If the down payment is not your own personal funds, the contributor must document that repayment is not expected.

Michael Cohen · Answer

@Jess F. - all mortgages will have a seasoning period; meaning you won't be able to immediately refinance. Most likely 6 months minimum.

Matt Lefebvre · Answer

@Jess F. it is possible to do, but it might take a while to find the right lender.  I've had a client purchase multiple properties by securing a business line of credit against their personal residence (which was free and clear) and use that as the downpayment for several rental properties.  He technically purchased it no-money-down, but be sure to factor in the cost of a secondary loan when determining how viable the investment is.