Cash out Refin Lenders for Rental in TX

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Cash out Refin Lenders for Rental in TX

Alfred Litton
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes

Hi Folks,

Hope to hear advice on possibly doing a cash out refi on one of our rentals here in Texas. Looking to pull out funds to pay off the last of my daughter's tuition. Anyone have any information on the following?

--Are 75% LTV loans possible right now?

--What sort of reserve requirements are out there?

--Rates and points at the present time?

--How long to close?

If you have any info on what things are looking like out there, especially with these sorts of questions, please let me know. If you're a broker, please DM me.

Alfred

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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
3y
Quote from @Alfred Litton:

Hi Folks,

Hope to hear advice on possibly doing a cash out refi on one of our rentals here in Texas. Looking to pull out funds to pay off the last of my daughter's tuition. Anyone have any information on the following?

--Are 75% LTV loans possible right now?

--What sort of reserve requirements are out there?

--Rates and points at the present time?

--How long to close?

If you have any info on what things are looking like out there, especially with these sorts of questions, please let me know. If you're a broker, please DM me.

Alfred


Yes - 75% LTV Cash-out DSCR Refinances are available currently

Reserve requirements typically range from 3-6 months PITIA - some DSCR lenders will allow cash-out proceeds as reserves

Rates and points generally in the 7-9% range for rates and anything from zero points to 3 or 4 points if you buy down the rate substantially

Closing timelines generally 3-4 weeks, appraisal turn times are pretty quick currently

[email protected]
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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Alfred Litton:

    Hi Folks,

    Hope to hear advice on possibly doing a cash out refi on one of our rentals here in Texas. Looking to pull out funds to pay off the last of my daughter's tuition. Anyone have any information on the following?

    --Are 75% LTV loans possible right now?

    --What sort of reserve requirements are out there?

    --Rates and points at the present time?

    --How long to close?

    If you have any info on what things are looking like out there, especially with these sorts of questions, please let me know. If you're a broker, please DM me.

    Alfred


    Yes - 75% LTV Cash-out DSCR Refinances are available currently

    Reserve requirements typically range from 3-6 months PITIA - some DSCR lenders will allow cash-out proceeds as reserves

    Rates and points generally in the 7-9% range for rates and anything from zero points to 3 or 4 points if you buy down the rate substantially

    Closing timelines generally 3-4 weeks, appraisal turn times are pretty quick currently

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    9Reply
  • Joe Alonso
    Lender · Miami, FL · Member since 2017 · 18 posts · 6 votes
    3y

    Alfred - I can help.

    Yes, 75% cashout is possible, but it's score driven.
    Cashout will serve as reserves. 
    I can quote you based on your scenario. Please DM me the particulars, and I'd be happy to proposed. 
    Close within 30-days if we all work in tandem.

    Thank you.

    0Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    You can do this with a DSCR loan. As long as the property cash flows and you meet a few other guidelines they will lend you the money.

    0Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 510 votes
    3y

    @Alfred Litton, 

    1. Yes, 75% LTV is possible depending on the lender. Some lenders are tightening up their lender standards now. I work with lenders who do 75% cash out depending on credit score. Generally 700+ credit scores will get you best cash out options with the lenders I work with.

    2. Some lenders will use your cash out proceeds as reserves so no reserves are needed for DSCR loans.

    3. Rates and points depend largely on LTV, credit score and whether you're cash flowing. More on that below.

    4. Loans are closing anywhere from 2.5-4 weeks depending on how quickly the appraisal comes back and who you are working with. Generally banks move more slowly than brokers as they have more red tape to contend with. They are also more conservative with the underwriting and credit standards and you will hear "no" more often from them. 
    .
    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350

    Insurance = $100

    Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250Insurance = $100

    Association Dues = $25

    Total PITIA = $1875

    Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    Lender terms and fees vary widely. As a mortgage broker, I shop my clients' loan to get them the best possible loan and the least fees while helping them to reach their investment goals. I'll send you a message as well.

    [email protected]818-770-0340
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    1Reply
  • Chad Davis
    Lender · Richmond VA · Member since 2012 · 311 posts · 33 votes
    3y

    @Alfred Litton PM Sent 

    0Reply
  • Alfred Litton
    OP
    Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
    3y

    Thanks so much to all of you! This is very helpful.

    0Reply
  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    3y

    My best two lenders are dong 75% LTV for cash-out at around 7.7% without a buy down. I think you can buy it down to around 7% or so.

    0Reply
  • Eugene Neal
    Lender · Member since 2022 · 138 posts · 20 votes
    3y
    Quote from @Alfred Litton:

    Hi Folks,

    Hope to hear advice on possibly doing a cash out refi on one of our rentals here in Texas. Looking to pull out funds to pay off the last of my daughter's tuition. Anyone have any information on the following?

    --Are 75% LTV loans possible right now?

    --What sort of reserve requirements are out there?

    --Rates and points at the present time?

    --How long to close?

    If you have any info on what things are looking like out there, especially with these sorts of questions, please let me know. If you're a broker, please DM me.

    Alfred

    1. Yes, 75% LTV is available possible up to 80% depending upon experience. 

    2. We may use your cash out proceeds as reserves so no reserves are needed for DSCR loans.

    3. Rates and points depend largely on LTV, credit score and whether you're cash flowing. 

    4. Loans are closing anywhere from 5 to 7 business days depending on the appraisal.

    We are a direct lender so if we tell you yes, then it is yes. Please reach out if you are looking to approach the next stage.


    0Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y
    Quote from @Alfred Litton:

    Hi Folks,

    Hope to hear advice on possibly doing a cash out refi on one of our rentals here in Texas. Looking to pull out funds to pay off the last of my daughter's tuition. Anyone have any information on the following?

    --Are 75% LTV loans possible right now?

    --What sort of reserve requirements are out there?

    --Rates and points at the present time?

    --How long to close?

    If you have any info on what things are looking like out there, especially with these sorts of questions, please let me know. If you're a broker, please DM me.

    Alfred


     80% is possible if the property cash flows.

    About 30 days to close.

    Rates are ltv dependent.  The lower the ltv, the lower the rate.  Generally in the 7-9 range as others have said.

    0Reply
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