Hard to refi a rental property?

Question

Tony R. Yagiela · Answer

I have done a few refinances before, but there has always been a few years in between them.  I don't know if/how doing multiple refinances in a short period of time will impact your loan eligibility.

Is there a reason why you wont use the proceeds from your primary residence refi as your down payment for the second rental?  Or forgo the primary residence refi all together and just take more equity out of the first rental property to buy the second?  Closing costs can add up so Ive always tried to avoid them (unless you significantly save on the interest rate)

Most big banks will loan 75 to 80 LTV and having a signed lease to show income on the property will help your debt-to-income ratio.  If you can show sufficient income on the first rental, I don't think youll run into any problems.

Good luck!

Tyler Huntington · Answer

If you have no problem doing the cash out refi on the primary, then doing a cash out on a free and clear rental should not be any more difficult. Understand, if you pay for the rental in full with cash, you can do an "agency delayed financing loan" within 6 months. The lender will use the original purchase price regardless of value (if the value is higher than your purchase price they will still use purchase price) After 6 months then you can use the actual value and not the purchase price.

Good luck