I bought a property in February for 39k. I have the property rehabbed and have a good tenant in place. I want to refinance to pull out cash to buy another property. I have tried several banks today and they are giving me crazy high interest rates and huge closing cost..I have a local bank wanting to do a heloc and assume my first mortage but idk if that would be a good idea or not...
Home value now 85k
Hey @Joe Taylor I'm going through the refinancing process now as well. It just depends on the rates the banks are charging and the LTV they allow. I've found commercial lenders (small banks) to be the most lenient and allow better LTV's with varying terms. If the HELOC has a good rate and LTV then that may be better as it would require alot less in closing costs and hassle.
@Benjamin Seibert the small bank that wants to do the heloc for me wants to assume my first mortage? Which means off the bat I will have a draw for the existing mortage..Does this sound correct?
@Joe Taylor that sounds about right. What would the interest rate and other terms be for this?
6% interest is what she said. I thought that was high but after calling other banks i think for a heloc it is not to bad?
@Joe Taylor - Unfortunately closing costs are always pretty high, mainly because you have to prepay taxes, insurance + legal and transfer fees. I would keep calling around. You should be able to get 80% LTV with a rate around 5%. Smaller credit unions will usually only charge you a point to do the loan as well. I wouldn't pay more than that
Thank you for the info i will certainly keep trying