Hey BP So bare with me on this one because its sort of complicated.
I am currently under contract to buy a duplex for 190,000 but is valued at 220,000 now I have all cash to purchase the property but i would rather use a private lender. Now since my offer is "all cash" because i do have the money in my bank account so i can show proof of funds, i can snatch it up for a bit of a discount. I figure it would take two months to find tenants and then be able to refinance to pay off the private money. I know banks do refinances based on payment value and not appraisal and i want to refinance two months into the property to pay off the hard money. To then have more capital to play with. Btw this is my first property and if you guys think im over my head i appreciate realness.
Here is the main question!?
Would a bank find me favorable for a refinance of $120,000 with the $195,000 in my bank account and give me a better rate or should i just purchase all cash find tenants and then refinance with less then 20k in my bank. Another factor is I don't have proof of income for the past two years but i have no debt at all. and my credit score is in the 700's
Feedback would be greatly appreciated on which route i should take
I wouldn't say that banks do refinances "based on payment value and not appraisal." If you're not living in this home, the bank is most likely only going to give you 65%-70% of appraised value. Additionally, depending on your bank there are title seasoning requirements (i.e. 6-12 months) before the bank will finance. Unless you're getting something, such as commercial loan. I just refinanced a couple properties (SFRs) with a local commercial lender and they would only lend up to 65% of the appraised value. Title seasoning was not a requirement.
I'm thinking that since this is your first property and you have little to no landlord experience, banks will be reluctant to use your proposed income on the property. In my opinion, I'd want the most money in the bank account since you have no income to show.
I'm no mortgage expert. Talk to a bank that you'll be using and see what they suggest.
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