Mortgaging a Free and Clear Property

1 Reply

Hello community! I would like to know if mortgaging a free and clear property is just as hard as getting financing to purchase. My partner and I are having trouble getting financing to purchase because my partner's DTI is around 70 percent and mine is just as high and ive only been a real estate agent for a year. We have enough cash to purchase at around $50k and rent out but we want to mortgage to roll onto the next property and repeat. Thanks in advance!

Hi Robert,

Typically it is easier to refinance but not always. When you buy a new investment property typically the most lenders will lend is 80% of the value, sometimes 85%. If you don't need that much you can refinance your free and clear property for 40%, 50%, up to 75% or 80% LTV (loan to value). It will be easier to get a 40% or 50% refi loan than an 80% or 85% purchase loan. There are a lot of factors that will need to be considered but if your house is worth $100,000 or more then you should be able to get an additional $50k+ pretty easily....Assuming you don't have a lot of other debt.

Best of luck.


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