Questions to ask Indianapolis lenders for cash out refi

[Casey Sbrana]

Searching for distressed properties in Indianapolis to purchase and renovate. I’ve spoken with agents, wholesalers, PM’s, some contractors, hard money lenders, etc. But still have yet to find a good local lender who can refinance a property out of the hard money I’m using to acquire and rehab it. I need to know that my exit strategy is solidified before I start offering on properties. 

I want to ask things like their LTV, basic rates and loan terms, seasoning period, etc. What are other good questions I should be asking? And who should I be asking these questions too? Perhaps you've done something similar in the past and know of a good lender who I could chat with.

Thanks BP!

[Ritch Bonisa]

1. Points and interest
2. Loan Terms
3. ARV – Loan based on ARV or current value
4. Upfront fees – origination/processing
5. Inspection/Draw fees
6. Draw criteria
7. Down payment
8. Penalties & fees
9. Requirements & time to close

[Stephanie Medellin]

@Casey Sbrana. What is preventing you from finding a lender?  Is it loan amount, seasoning period for cash out, or not being able to qualify for the loan because of debt to income, credit, or other issues?  Or will the property not have enough equity?

[Casey Sbrana]

I personally wouldn’t qualify for a loan because I’m a 1099 employee and don’t have 2 years of consistent income history yet. But I have family members who I could potentially co sign with. I imagine I’ll need them to apply online or submit some kind of credit report/proof of income. But I mostly just want to know about their different loans first. 

But the loan would be for a refinance considering I planning to buy and rehab the home with hard money (spoke with a HML already). So I'm just trying to reach out to different lenders who could potentially Issue a loan against the ARV once it's all said and done. I just want to know all the specifics of their refi loans first.

[Stephanie P.]

@Casey Sbrana

The fact that you're a 1099 and won't qualify for conventional financing narrows the field.  Find a portfolio lender that will do no income verification. For cash out, generally, you'll be capped at 75% loan to value based on the new appraised value after 90 days, have evidence that work has been done and the property is stabilized.

Stephanie