Refinance

5 Replies

There are a lot of factors that will dictate financing terms/requirements that you would need to share in order to get a detailed responses. You mention an "investment property" which could be a SFR, a large multifamily property, an office building, etc. Financing requirements vary significantly between these. You may also encounter different seasoning requirements depending on the type of property. If you can provide what type of property it is and what type of financing you're looking for (30 year fixed, commercial 5/20, etc.) that would help answer the question.

@Lloyd McFarlin  The refi loan amount will be based on when you refi.
* If you refi within 6 months, then it is considered a Delayed Financing loan. In this case the loan about it based on the purchase price.
* If you let the purchase season for 6 months, then you can get a new appraisal (after 6 months), and the loan about would be based on the new appraisal.
Originally posted by @Lloyd McFarlin :

If I pay cash for an investment property how much am I likley to be able to pull out on a refi?

To add on Upen's insights, your cash out capabilities during delayed financing will be slightly different from a traditional cash out refinance.

Traditionally, on a Conventional cash out loan you can go up to 80%. FHA loans are slightly more liberal so they will allow up to 85%. Assuming you paid cash for a property, within the first 6 months, your cash out capabilities with delayed financing according to Fannie and Freddie are limited to only 70% on single family homes and 65% on manufactured homes.

Being a Fannie and Freddie guideline its not a typical lender overlay. It's something a lender won't be able to work their way around for the sake of the borrower. It's one of those "it is what it is" situations.

Could I add an example to piggy back off of?  I placed an ALL CASH offer today for a Manufactured Home on 2+ acres.

Assumptions:
Cash Offer = $50,000

ARV = $100,000

A.  Refi less than 6 months (30 year traditional loan) = ___________________

B.  Refi after 6 months (30 year traditional loan)= ________________________

If I'm reading the above correctly, then:

A. = Delayed Financing of $50,000 and only up to 65% (Manufacture) = $32,500 Cash Out Loan 

B. = Standard Fanancig of $100,000 and only up to 65% (Manufactured) = $65,000 Cash Out Loan

Please correct me where I misunderstood.

Thanks!