LTV and Cash Out Refi on Duplex

[Michael Keane]

Hello BP Community. 

I purchased a duplex for $260,000, putting down 25% ($65,000) on a conventional loan (30-year fixed, 3.625%) of $195,000. 

$56,000 of the $65,000 down payment was a HELOC on my primary residence. The remaining $9,000 was cash.

After rehabbing both units, I anticipate ARV to be about $370,000.

When in comes time to refinance, the principal balance on the loan will be about $192,500. 

I understand the limit is 70% LTV for a cash-out refinance.

During the refi, will lenders take into consideration the fact that I used a HELOC for part of the down payment during the original acquisition? Will this affect the amount of equity I can cash out?

[Torrell Palmason]

The cash-out limit of 70% LTV on your Duplex will not take into consideration the Equity taken out on your primary. You will receive the 70% cash-out on your refi regardless what was used for your down payment.

Best of Luck!