5.75% for a Cash Out Refinance Loan after rehab

Private Lending & Conventional Mortgage Advice
7yFollow

5.75% for a Cash Out Refinance Loan after rehab

Aman A.
Rental Property Investor · Redmond, WA · Member since 2017 · 47 posts · 37 votes

Hello,

I bought a property (SFR) earlier this year and completed the rehab and renting. I waited the seasoning period for the conventional mortgage (6 months) and spoke with the lender this morning. I was offered a 5.75% 0 points rate on a 30 year mortgage for a conventional cash out refinance loan.

While I know that rates have gone up in the last few months, is this still a reasonable / good rate? Or I can do better?

I have 780+ credit score, in case that info is needed.

1Reply
59 views

Most Popular Reply

Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
7y

@Brian Ellis

Here's my cheat sheet:

4Reply
See this reply in the discussion

36 Replies

Jump to latestLatest
  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    7y

    @Aman A. this sounds reasonable....have you gotten your Loan Estimate yet?  Your Loan Estimate is the document that holds the lender accountable.  If you got that in hand then you should be able to count on those figures.  If you haven't gotten that yet....well, it's not official.   Ask them for one asap to confirm.

    2Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y
    Originally posted by @Aman A.:

    Hello,

    I bought a property (SFR) earlier this year and completed the rehab and renting. I waited the seasoning period for the conventional mortgage (6 months) and spoke with the lender this morning. I was offered a 5.75% 0 points rate on a 30 year mortgage for a conventional cash out refinance loan.

    While I know that rates have gone up in the last few months, is this still a reasonable / good rate? Or I can do better?

    I have 780+ credit score, in case that info is needed.

     Career milestone for me not too long ago was my first Fannie loan over 6%. A year ago rate sheets didn't even go that high. 

    (He did not have a 780 FICO...)

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    7y

    What loan amount ?whatproperty value?Assuming loan to value is under 75%a slightly lower ratepossible with 0 fee ..in general the pricing you outline is OK

    0Reply
  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    7y

    how are you getting it so cheap? 5.75% and no points? LOL yes this is good

    what's the home price and how many loans do you have?

    [email protected]Podcast Guest on Show #301
    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Chris Mason:
    Originally posted by @Aman A.:

    Hello,

    I bought a property (SFR) earlier this year and completed the rehab and renting. I waited the seasoning period for the conventional mortgage (6 months) and spoke with the lender this morning. I was offered a 5.75% 0 points rate on a 30 year mortgage for a conventional cash out refinance loan.

    While I know that rates have gone up in the last few months, is this still a reasonable / good rate? Or I can do better?

    I have 780+ credit score, in case that info is needed.

     Career milestone for me not too long ago was my first Fannie loan over 6%. A year ago rate sheets didn't even go that high. 

    (He did not have a 780 FICO...)

    too funny I remember 15 to 18% rates and if you could get sub 10 you were a rock star.. my first mortgage was 9% 

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Aman A.
    OP
    Rental Property Investor · Redmond, WA · Member since 2017 · 47 posts · 37 votes
    7y

    @Dave Skow - The loan amount will be about 80K. Property ARV is around 115K. I will only pull out 75% of the appraisal. Don't want to be over leveraged.

    @Jay Hinrichs- Thank you for your response. I follow you up a lot on the forums, valuable advice. I have heard that the rates in the far past were that high. I hope they don't go that high now :-)

    1Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    7y

    perfect then …..keep in mind that with an amount of  80K  - a small  rate difference isn't going to make difference in your payment ...keep ltv  at 75%  ( no higher ) in order to get best rates

    3Reply
  • Kevin Dong
    Flipper · Fort Myers, FL · Member since 2017 · 182 posts · 98 votes
    7y
    I am getting one for 6.8 %. Yours is better
    1Reply
  • Sen A.
    Rental Property Investor · Union City, NJ · Member since 2018 · 40 posts · 66 votes
    7y
    @Aman A. Check out Aimloan. We just got a 5.125% rate for 25% down on a similarly priced sfr. Wanted to go with a local lender but they were much higher.
    1Reply
  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    7y

    @Aman A. Our last set of refinances were at that rate but then we got a rate discount by setting up direct pay our of the checking account we opened with them.  We also had to enroll in a few other services, but all in all it was cheaper to do it that way.

    480-206-1209Podcast Guest on Show #287
    0Reply
  • Darlington Agu
    Rental Property Investor · Los Angeles, CA · Member since 2018 · 56 posts · 17 votes
    7y
    @Aman A. I would say that’s not bad at all. I’m personally doing a cash out refinance on a SFR for 5% but it’s a 7 yr/Arm. I’m using a credit union way better rates. They do offer 30yr fixed for 5.5 80% LTV.
    1Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    7y

    @Darlington Agu What's your strategy after year 7? Rates will be way higher by then I'm sure. 

    0Reply
  • Melvin ListBusiness Member
    Lender · Tampa, FL · Member since 2016 · 1k+ posts · 381 votes
    7y

    @Aman A.

    @Kevin Dong with smaller loan amounts the pricing will be a little higher.  Larger loan amounts can absorb the Loan Level Pricing Adjustments

    C2 Financial
    WebsiteView Page
    0Reply
  • Rob Barry
    Rental Property Investor · Ramsey, NJ · Member since 2016 · 72 posts · 55 votes
    7y

    I'm doing 6.125. I'd take 5.75 all day.

    0Reply
  • Aman A.
    OP
    Rental Property Investor · Redmond, WA · Member since 2017 · 47 posts · 37 votes
    7y

    @Melvin List Thank you. I didn't know that.

    Thank you everyone for your response. Really appreciate it.

    0Reply
  • Brian Ellis
    Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
    7y

    @Aman A. Could you have received a higher LTV if you wanted to? Im having a hard time finding a lender who will even go to 75% after the 6 month seasoning period.

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y
    Originally posted by @Brian Ellis:

    @Aman A. Could you have received a higher LTV if you wanted to? Im having a hard time finding a lender who will even go to 75% after the 6 month seasoning period.

    Fannie and Freddie are both capped at 70% LTV on a cash out refi 2-4 unit investment. There's some portfolio wholesale stuff that'll go higher, but usually I don't even bother to quote it since the rate/fees/terms are otherwise... less than ideal.

    1Reply
  • Brian Ellis
    Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
    7y

    @Chris Mason I wish I had done a little more research prior to buying.

    Found myself a duplex, paid 240k with 25% down. Worth 290k now. But a cash our refinance at 70% doesn't do much for me after closing costs etc.

    So now im stuck with a 70k HELOC payment. Any suggestions?

    Thank you in advance!

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y

    @Brian Ellis

    Here's my cheat sheet:

    4Reply
  • Brian Ellis
    Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
    7y

    Thank you @Chris Mason Does it change after a year? Or are those numbers indefinite? 

    0Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y
    Originally posted by @Brian Ellis:

    Thank you @Chris Mason Does it change after a year? Or are those numbers indefinite? 

     Off the top of my head I'm 90% certain that after six months all the special restrictions for all scenarios go away, barring overlays. 

    (Using words like "all" or "never" or "always" is dangerous, hence only 90% certainty -- I do not have all 8,000+ pages of FNMA/FHLMC guidelines memorized. :P )

    2Reply
  • Roger Hefner
    Yuma, AZ · Member since 2015 · 140 posts · 137 votes
    7y
    @Aman A. I just did a cash out refi 4.99 rates are climbing . If you want to do pull the trigger.
    0Reply
  • Darlington Agu
    Rental Property Investor · Los Angeles, CA · Member since 2018 · 56 posts · 17 votes
    7y
    @Jaron Walling I planned my exit at year five to either refinance or sell in order to take advantage of any deals that may arise due to foreclosure.
    1Reply
  • Ron Fletcher
    Leclaire, IA · Member since 2016 · 161 posts · 130 votes
    7y
    @Aman A. I just closed on a duplex this week at 5.75%
    1Reply
  • Paul DefnginPro Member
    Lender · Rockville, MD · Member since 2008 · 498 posts · 199 votes
    7y

    @Aman A. that’s a solid rate, and even if the rate is 6.125% that’s STILL a solid rate. For your loan size that’s about $20 difference a month. Putting it in another perspective, if you eat out once or twice a week, you’ll spend probably more than $20. If you like Starbuck coffee, you’ll outspend that in a week.  

    That said, big congratulations on your deal. To your continued success.  

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free