Can you refinance a property you paid cash for?

8 Replies

To begin, I apologize for my ignorance if this is question isn’t valid. I have the ability to borrow cash in order to make a deal and close quickly. But I don’t want my cash “lender” having to wait 1-5 years for them to get their money back (If I sell). Is there a way to pay cash for a property and then take out a mortgage loan through a bank or mortgage lender?
Originally posted by @Fernando Garcia :
To begin, I apologize for my ignorance if this is question isn’t valid.

I have the ability to borrow cash in order to make a deal and close quickly. But I don’t want my cash “lender” having to wait 1-5 years for them to get their money back (If I sell). Is there a way to pay cash for a property and then take out a mortgage loan through a bank or mortgage lender?

 Yes. If you have more questions PM me for sources.

Yes you can certainty get money out of a property you own outright. You can take out an equity loan or refinance as you mentioned of course provide you have good credit. 

It has been mentioned befor that when you take out any kind of loan there are always extra fees associated with that loan, such as closing costs (mentioned) loan origination fees. etc. etc. You should find out all of the facts associated with your borrowing proposal to be sure it really does make good financial sense.

Whatever property you buy with borrowed money should provide for the costs of your money as well. Money is never free.

@Fernando Garcia Absolutely, it’s called a Cash Out Refinance, just keep in mind bank will only give you 70 to 90% value of property and interest rates are slightly higher than conventional loans. Although rate might be higher it’s typically fix, another option you might want to consider are HELOCs..

in addition to whats been mentioned above, i would go one step further and talk with 2-3 traditional banks before buying the property to see what their requirements are for a "cash out refi".  that way you build a little rapport with that bank, show your cash "lender" your intensions on how to pay them back, and also know exactly how good of a deal you have from the start.

Agreed with above. A lot of investors use cash to buy since they can usually close quicker and get a lower sales price by closing in cash. I have some lender references as well if you need any!!