Cash out refinance before finding next deal

[Steven Ruff]

I’m looking for opinions on my plan. It obviously seems right to me but would love to hear any other ideas you guys may have.

I have a str in NEPA that I adding a lot of equity into.   I can cash out refinance for the same rate and have enough for downpayment/rehab/startup costs of the next str I want to buy.

I’m looking for another str in the area. I have access to 401k loan or pension loan to cover the down payment as well. 

I am starting the refi process now with the theory that interest rates are not going down any time soon. Even without finding a property yet I would still be ahead having 100k in my hands at a cost of 4.75%. Even if I fund the next str differently I could use this money to lend at a higher rate.


If I do find a home during the time before my cash out refi closes, will it be hard to start another mortgage application for the new str?

[Steven Foster Wilson]

Quote from @Steven Ruff:

I’m looking for opinions on my plan. It obviously seems right to me but would love to hear any other ideas you guys may have.

I have a str in NEPA that I adding a lot of equity into.   I can cash out refinance for the same rate and have enough for downpayment/rehab/startup costs of the next str I want to buy.

I’m looking for another str in the area. I have access to 401k loan or pension loan to cover the down payment as well. 

I am starting the refi process now with the theory that interest rates are not going down any time soon. Even without finding a property yet I would still be ahead having 100k in my hands at a cost of 4.75%. Even if I fund the next str differently I could use this money to lend at a higher rate.


If I do find a home during the time before my cash out refi closes, will it be hard to start another mortgage application for the new str?

Steven, I love the way you were thinking and thinking all of the things through. That’s a great business mind. I know that some lenders will actually do both at the same time. I would call around and ask lenders these kind of questions. You would be amazed at what lenders could do. Here in Ohio one of our lenders will refinance a property and use the money for that for the next down payment at the same time if you go through the same lender. I know that’s not very common but I was surprised that they would do that. Every time we have refinanced it was just nice to have the money on hand so that when the good deal came we could jump on it.