Does a Home Refinance Require a Down Payment?

[Jose Trujillo]

Hey BP !!! I am currently running numbers for a possible BRRR deal and I was wondering if a cash out refi required a down payment like conventional mortgages do. I don't want a 10-20% down payment to catch me by surprise. Thanks in advance !!

[Alexander Felice]

don't think in terms of downpayment, think in terms of LTV.

are you getting an 80% LTV loan, if so you'll need 20% equity either built into the property of from your added liquidity (downpayment).

a conventional cash out refi for fannie mae is 75% LTV, so when you do yuor rehab you need to add an additional 25% added equity in order to refi without any additional injection. This does not include costs of the loan which you may also have to pay.