After rehabbing a two-family in Cincinnati, I am now beginning to pursue a cash-out refinance. My initial discussion with Quicken has led me to believe that some of the governmental guidelines around these mortgages may have changed in the last year. My goal is a 30 yr mortgage at 70% LTV on a property value of about $130K. Obviously some of the issues revolve around max LTV and the minimum loan amount. The mortgage officer also indicated that a 70% LTV loan may be far more expensive than 60%. Can anyone comment on the typical constraints they are seeing for these loans?
@Jeff Roberts Yes there is difference in interest rate but you have to remember you are not going to refinance this property again at least for some time. Ask your lender if you can pay points can you get the same interest rate which you will get with 60% ltv. Paying point will give you access in more equity.
I just did a cash out refi with Watch Hill Bank in Cincinnati. They offered an 80% LTV 3/1 or 5/1 ARM at 20 years AM. My rate was 4.5% with 10.5% cap, with 2% max adjust per year. I was very happy with my experience with them, and decided to use them on another commercial mortgage just a few weeks ago. I also spoke with a bank that offered a 25 yr AM, but lower LTV. So I guess it depending on whats most important, I did not find a bank that offered a cash out with 30 yr AM or a fixed rate. Best of luck!
After poking around for a couple of days I have received multiple offers for fixed rate, 30 year cash-out refinances from places like Quicken, Loan Depot, Rate.com, etc. It seems that there is an LTV threshold of 70%, with 75% possible but demanding a premium. Also, there appears to be another threshold for loans of $100K or less. That is, under $100K is going to cost you more in points and/or interest. I'm not clear on how the fact that this is a two family influences those numbers. Adding these together, it looks like optimal refinance for using the BRRRR strategy is going to be a home that appraises for greater than $143K after renovation.
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