Refinance loan to pull out downpayment

6 Replies

Hello,

I just bought a condo for $195,000, put 20% down and got a loan for the remaining. From what I could read on BP, it seems like I could refinance my loan and get my down payment back. How can I do this? What are the prerequisites? 

According to me it seems almost too good to be true. If I get my down payment back, I can then re-invest in another property and repeat the same process over and over. It would be great!

Thank you.

Quite possible! As long as value and LTV line up, sure. This means you bought it under value so that a 75-80 LTV refi >= existing loan + down pmt. Some lenders only go to 60-65 LTV but you don't say if this is investment or primary. Good luck!


@Ludovic Ott You would be able to essentially take out your down payment through a cash out refinance, but your property will need to have increased in value enough to do so. If you paid $195,000, that means your condo will need to appraise for $260,000 to allow you to do a 75% LTV conventional cash out refinance, or slightly more if you want to cover closing costs too.

Originally posted by @Ludovic Ott :

Hello,

I just bought a condo for $195,000, put 20% down and got a loan for the remaining. From what I could read on BP, it seems like I could refinance my loan and get my down payment back. How can I do this? What are the prerequisites? 

According to me it seems almost too good to be true. If I get my down payment back, I can then re-invest in another property and repeat the same process over and over. It would be great!

Thank you.

Hi -- if you JUST purchased, and paid about fair market value, there aren't any reasonable cash out refinance options. You might be able to get a HELOC @ 90% CLTV, I'd suggest barking up that tree. Good luck!

Ludovic Ott, That is correct. The best way to make that down payment back quickly is buying a property with substantial equity in it. Or by finding properties that you can add value to by fixing up or adding space to. I would second the the HELOC by @Chris Mason.  

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