Recommendation on Cash Out Refi

6 Replies

Hello all BP Pros,

Want to get your opinions on this. Thanks in advance! I am trying to do cash out of my rental property. It's a single family home at south FL, purchased with all cash, free and clear, rented out. I was trying with one lender who said they can do the cash out at the beginning, but then after reviewing my 2016 tax return, which claim a loss on a K-1, they said they can not due to the debt to income ratio would not qualify (comes to negative..). So I turned to Finance of America Commercial (former B2R) and they said they don't need to check the tax return doc, but only lease agreement. The term sheet they offer is:

-75% LTV

-30 year fixed, rate at 6.88% with $689 to buy down

- 1% of loan amount

- Processing fee: $795

-Attorney closing fee: $500

-Title review fee: $500

-appraisal fee: $660

-$750 closing with LLC

and other regular closing cost.

They also have different buy down options, the lowest rate they can offer is $9500 buy down and rate is down to 5.5% 30 year fixed. I used B2R before when they offered 6% and 30 year fixed without buy down, but they no longer offer this rate. So want to get your opinions about this term sheet. And most importantly, if you have used/known other lender can do this no tax-doc loan with more competitive terms, please feel free to reach out to me, much appreciated! 

For a no or low doc loan, those terms are competitive. Typically, to get a better rate, other than buying down, you'd have to provide full docs and a 15-20 year amortization, which isn't all bad. 

Those terms seem pretty competitive.  Without having all of the term sheets in front of me, I seem to recall seeing very similar offerings.  The buydown price is largely relative to the price of the property, so if this is a $50k property, then that would be very pricey.... If it is on a $20MM property, then it is a great deal.  

Originally posted by @Steve McCondichie :

For a no or low doc loan, those terms are competitive. Typically, to get a better rate, other than buying down, you'd have to provide full docs and a 15-20 year amortization, which isn't all bad. 

 Thanks for your suggestion, Steve. I am going to negotiate and see if they can offer better deal. 

Originally posted by @Greg Downey :

Those terms seem pretty competitive.  Without having all of the term sheets in front of me, I seem to recall seeing very similar offerings.  The buydown price is largely relative to the price of the property, so if this is a $50k property, then that would be very pricey.... If it is on a $20MM property, then it is a great deal.  

Thanks Greg. I believe if it's a $20MM property, then the buy down should be a lot more. This is based on a 300K SFH, so the buydown isn't that bad. Thanks for your advice!