Manvel, TX · Member since 2014 · 309 posts · 127 votes
My husband and I are newbie investors in Houston looking for our first buy and hold property. It was either on a podcast or here in the forum that I heard that sometimes you have to estimate expenses, but when an available number is out there (property taxes, for instance), you should track it down and use it in your deal analysis. That's what I'm trying to do.
I understand that closing costs vary. Nevertheless, the most specific info I have been able to find is that closing costs on a cash-out refi can be "hundreds to thousands of dollars." I'd really like to use a better number than that.
Can anyone give me any kind of a rough estimate on this example?
Rental Property Investor · Charlotte, NC · Member since 2013 · 491 posts · 253 votes
12y
@Leigh Ann Smith - the closing costs are going to depend on lots of different items, hence the 100's to 1000's that you have heard. Are you going to be paying any points? Origination/Lender fees? What are the local government fees? Prepayment of taxes and interest?
For your "rough" estimate, you might want to go to an online mortgage company that does cash-out investment refi's. One that I have looked at (I have not used nor do I have any connection with) is AmeriSave Once you put in your numbers, it will then give a list of their mortgage products with closing cost estimates.
I hope that gives you what you are looking for. Also, from what I am seeing, most lenders are only doing 75% LTV cash-out refi's. Do you already have a lender offering 80% LTV? If so, ask them to provide you an estimate of closing costs.
Rental Property Investor · Charlotte, NC · Member since 2013 · 491 posts · 253 votes
12y
@Leigh Ann Smith - the closing costs are going to depend on lots of different items, hence the 100's to 1000's that you have heard. Are you going to be paying any points? Origination/Lender fees? What are the local government fees? Prepayment of taxes and interest?
For your "rough" estimate, you might want to go to an online mortgage company that does cash-out investment refi's. One that I have looked at (I have not used nor do I have any connection with) is AmeriSave Once you put in your numbers, it will then give a list of their mortgage products with closing cost estimates.
I hope that gives you what you are looking for. Also, from what I am seeing, most lenders are only doing 75% LTV cash-out refi's. Do you already have a lender offering 80% LTV? If so, ask them to provide you an estimate of closing costs.
Manvel, TX · Member since 2014 · 309 posts · 127 votes
12y
Thanks, @Chris T. I tried the Amerisave site and was interested to find that they "do not currently offer any loan products to fit your loan criteria." I even tried plugging a 50% LTV, and it wouldn't give me anything! I do not already have a lender. I was making assumptions (always a bad idea) that we could buy the property, rehab it, then do a cash-out refi to recoup some of our initial cash outlay since that seems to be a common strategy among BPers. Am I missing something?
@Shaun Weekes , we did a cash-out refi on our personal residence in Texas about 10 years ago. Have the laws changed or has there been some other change that is causing banks not to offer this anymore?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
Having done a couple of rate and term refis for about those amounts I'd estimate your closing costs at around $2000 +/-. Prepaids and escrow account balances can skew this number. Typically escrow account balances on the existing loan are applied to the loan balance and reduce the payoff. But then you have to come out of pocket to reload the escrow account for the new loan. So, it might feel like you have $3000 of closing costs.