Timing of cash out refis

7 Replies

I have a personal house and 2 rentals. My understanding is that I can only do a total of 4 cash out refis. I am currently looking at 2 houses: one would be a cash out refi (needing a 6 month seasoning) and the other would be a 20% down and taking out a first then using a HELOC up to 75% ARV to recover the cash. I would be buying the cash out refi first and then the 20% one about 2 weeks later.

Would taking out the first loan (on the second property) nullify my ability to do the cash out refi after 6 months?




You'll need to ask your lender what their particular rules are, and if their rules don't suit you keep asking different lenders until you get the answer you want.  Some lenders require 6-12 months of seasoning, others that understand investing better don't require any.  Once you have a handful of properties you can look into cashing out into a blanket loan which will cover multiple properties.  There's lots of good info on that here on BP if you search the term.

You can also look into private money sources in your area.

sorry, southeast Virginia. Thanks

I have some emails out to lenders in my area. My concern is that the second purchase of the 25% and HELOC would could knock me out of using the cash out refi option on house number 4 at the 6 month mark.

That's a question for a mortgage broker, but be careful. Just because they say its okay over the phone doesn't mean they won't deny you when it comes time to run it through an underwriter.

I had a broker get upset with me because I insisted she not commit to an appraisal (cost of $450), before clearing underwriting, unless she were going to foot the bill if I was denied. In the end, they were unwilling to do the loan, (cash out refi on a fifth mortgage) and I'd have been out the $450 if I'd have let her.

I did get a response from a knowledgeable mortgage broker that works with lenders.  He said the purchase of the 5th house would make me unable to use the cash out refi option.  He did mention a Delayed Financing Exception that might be able to do the job but would vary from lender to lender.

I have some appointments next to sit with some lenders and get some specifics,

@Pete Carlson

The answer is yes. You can only have up to four mortgages for cash out refinances to go based on ARV with 6 months seasoning. The other property will give you four mortgages so the cash out refinance would make you hit mortgage 5. You do have the option of delayed financing - prior to 6 months for up to ten properties. You would still go based on ARV and given the LTV is there, you are then limited to pulling out purchase price plus closing costs.

Here is some info I wrote on delayed financing.


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