Cash Out Re-Fi ....got any tips?

Question

Evidently there is an art to creative financing. (I'm learning this recently)

I sort of need a "primer" or basic overview of cash-out refi's and how that game is structured, an overview of the basics, how it works....

----Do you have to "season" your loan for a while before it will qualify?

----Is it tricky to get a lender to go along with loaning OVER the payoff amount?

----Do the regular LTV ratios apply to refi's?

Can someone give me an overview of what to expect, what the banker will be looking for, typical questions i may be asked? (etc)

Thanks in advance. You guys are great!

CL Ziegler · Answer

@Chris Adams ....So far I've bought all turnkey's. That's a great tip, using a different bank. I have been looking at hard money too, and it looks good to me so far. I hope there are no pitfalls I'm missing. Looks simple and straightforward, if one's fundamentals are solid. I also like the faster process.

Thanks for your input, everyone.

Chris Adams · Answer

@CL Tumlin Are you buying distressed properties? Or are you just finding great deals on turn key properties?

All banks are going to have different guidelines you have to follow. And don't be surprised if you have to talk with 20 banks to find 2 that are willing to do what you want.

If your financing the initial purchase of the property, then it might be a good idea to use another bank for the end loan financing. This may give you a better chance of cashing out some of the new equity.

Seasoning requirements will change for you as you get more experience. When I started out I was told 6 months, my new banker told me the other day that my experience in rental properties has gotten to the point they don't care about seasoning of my new properties.

I find it best to approach the banks and tell them what I want, rather than asking them what they can do.

Larry K. · Answer

No seasoning needed.  Just a finished, renovated property.

I think the answer to your second question depends on the appraised amount

I have gotten 75%LTV on all 3 of my NOO 2 Families.

George P. · Answer

i got 75% LTV last year. at around 5.25%. i was happy and it helped me buy another house (3 days later).

pretty standard, show me this, statement of that, w2, blah, blah. i had purchased the house for 57 and refied 1 yr later for 125k.

i had to wait 1 yr.