How difficult should it be to refinance one of my properties?

7 Replies

I have a rental that was a live-in flip. I'm at 63% LTV between a first and a HELOC. Both the First and the HELOC are in my personal name since I lived there for 5 years before moving and renting it out. Now I want to refinance the HELOC so I can pull out the additional equity that has increased over the past few years since I opened it.

If I leave the First alone will it be impossible to refinance the HELOC and re-subordinate it? or will I have to refinance both 1st and 2nd? Any ideas?

Originally posted by @Tyson Hosey :

I have a rental that was a live-in flip. I'm at 63% LTV between a first and a HELOC. Both the First and the HELOC are in my personal name since I lived there for 5 years before moving and renting it out. Now I want to refinance the HELOC so I can pull out the additional equity that has increased over the past few years since I opened it.

If I leave the First alone will it be impossible to refinance the HELOC and re-subordinate it? or will I have to refinance both 1st and 2nd? Any ideas?

You'll have to get permission from the first mortgage holder to subordinate the HELOC to a higher ltv.

I'm assuming the first is at a much more favorable position than current rates. Refinance the HELOC is a good idea.

@Tyson Hosey it would be hard to find a lender who would give you a cash out loan while having that HELOC open. Not saying it's impossible but it might be hard to find and when/if you do find it the rate terms might be not what you wanted.

Have you tried asking your HELOC bank to increase your credit limit on it?

I would try asking my current HELOC lender to re-appraise the property and increase the credit line.

@Andrew Postell

@Brian Garrett

I haven't thought about that specifically, mostly about refinancing it. However, when I got the HELOC it was my primary residence and now that it's not and it's a rental, my current bank won't touch it. And I'd hate for them to completely shut it down because I brought it up.. (call the note due etc etc). Normally I'd say it wouldn't hurt to ask, but in this case, it might actually hurt to ask haha

@Tyson Hosey you mentioned a rental in the first post and I totally glossed over it. I would say that it would be impossible for you to find a lender to give you a cash out loan on an investment property with a HELOC already on it. I think the right expectation for you to have is refinancing them both together into one loan.

@Brian Garrett

That's what I'm assuming, it's just a matter of finding them.

@Andrew Postell

yeah, I was thinking that they'd have to do both in one, but there might be one that does it stand-alone. I'm not looking to do a 3rd lien as a cash out, I'm just looking to get more out of the LOC since the equity has increased by so much.

the real crummy part about it, is that if I go with another company for the LOC and they have to have permission to re-subordinate, that would tip off the mortgage company that holds my first that it's not my primary anymore, and they could possibly want me to refinance into a different product...which I could do...but I wouldn't necessarily want to do haha