80% Cashout in 2022?

Question

Hi Everyone,

Are there lenders (non qm/llc) doing 80% cashout refinances on single family nowadays? I know there were some last year but it seems they are tightening their LTVs.

Brittany Minocchi · Answer

75% is what I'm seeing with most of my lenders.

Robin Simon · Answer

This is pretty much gone right now for DSCR loans (was very rare anyway in 2021 and earlier in the year already).  Might still be doable for a non-QM non-DSCR loan so would check with a mortgage broker or lender that does the whole non-QM suite, but its nots going to be a DSCR loan

Nick Belsky · Answer

@Trevor F.

There are a handful still doing 80LTV, but far and few in between.  75LTV is pretty standard right now.  I have at least 5 still doing 80LTV but all with different criteria.

Cheers!

Anastasia G. · Answer

@Trevor F. depending on price point there might be not too much difference between 75% & 80% LTV, however few things to consider

✔️ cash-out will have higher rates than purchase in most cases

✔️ 80% LTV will have also a higher rate (rate adjustment) than 75% LTV

✔️ there also might be limits on LTV with lower credit score

✔️There will be reserves requirements, some programs allow cash out proceeds to satisfy reserves requirements and some not..

✔️ If property is currently in the name of LLC or if you want to have it in LLC - there might be limits on number of owners in that LLC (if it is only you then there is no worry) Vesting in LLC might also have an impact on rate

✔️ some States might have restrictions on LTV & additional rate adjustments

✔️ some programs would not do DSCR if rents don't cover mortgage (DSCR <1) or there will be rate adjustment for higher if rents don't cover

✔️ some programs would not do DSCR if you do not own a primary residence

We typically would weight all these factors and then run side by side comparisons with 75% LTV & 80% LTV...The less equity you have in the property the more risk it is for investor the more restrictions/rate adjustments.. Hope this helps 😀

Matt Cartwright · Answer

@Trevor F. Hey Trevor, what state are you located in? We currently do up to 80% cash out in the following states AZ, CA, CO, GA, MI, MN,NC,OK,PA,TN,TX,UT,VA,WA.

Miranda Holland · Answer

There's definitely changes happening in the industry. But with the lenders I know that still do 80% cash out, it depends on different factors like property value and stuff like that.

80% Cashout in 2022?

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