help understanding a cash-out refi

[Patrick Everett]

hello I want to get a better understanding of how a cash-out refi works. if I have a property that is paid in full and I paid $100k in cash for it this year, if I were to do a cash-out refi on this property for 75% and get $75k back....when does this $75k have to be repaid back to the bank? what is the usual interest rate on a cash-out refi? how soon after I initial closed on the property for $100k can I do a cash-out refi? thanks Patrick

[Andrew Johnson]

Patrick Everett You have to pay it back based on the term of the loan. That will vary depending on if it's for a residential or commerical property. Best guess is that it will be a residential property for $100K and a 30-year fixed.

I think my cash-out interest rate was .25% above whatever the prevailing rate was at the time. You'll probably pay another .25%-.5% because it's a non-owner occupied (investment) property.

You could cash-out refinance right away but if you want to use the income for your DTI ratio they might only count 75% of it. Or they might make you wait for a 6 month "seasoning" period. When I talked to banks it seemed to vary.