Refinancing LTV on a small multi family income property

6 Replies

I'm interested in pulling some capital out of a duplex I own in the Hampton Roads area of Virginia. I've owned it for about 8 years, it's got an FHA loan on it, there's $112,000 on the loan, and I believe the ARV is $180,000. I'm trying to figure out if I can cash out refinance to an 80% LTV conventional loan on this type of property or should I refinance down to what the remaining balance is and then do a HELOC to pull out the rest of the equity(I'm not sure if that's even an option). I would also like to get rid of the FHA and PMI. If anyone could recommend any banks for this type of situation or any advice would be much appreciated.

@Derek Samuelson I think your scenario needs some analyzing.  And it's the type of analyzing that you will need a mortgage professional for.  Here's what you need to consider:

  • When you refinance, your rate will INCREASE, which will likely make your payment go up. This is because you purchased your home with a primary home loan...and those usually have much better rates than investment properties.
  • When you refinance, you will remove PMI, which should help decrease your payment some.
  • When you refinance with a conventional "cash out" loan, the maximum you will be able to receive is around $10,000 cash out.
  • When you refinance with a cash out loan, your rate will be EVEN HIGHER than just a regular "no cash out" loan.

So we really need a comprehensive analysis to see if this is worth it.  It COULD be worth just refinancing with no cash out.  And it MIGHT be worth doing the cash out loan.  We need you to get prequalified and run these scenarios by the lender you are using to see for sure.  Hope this helps in some way.  Thanks!

@Derek Samuelson oh, sorry.  I forgot to say "why" you could only go to 70% LTV and that's because it is a duplex. A duplex investment property you are going to be limited to 70% on just about every loan product. There MIGHT BE, a little small lender somewhere out there in the yonder...maybe...that can go to 75% but I think it would be unlikely.  Receiving 80% on a Line of Credit is more for your primary home. Not for an investment property.  Very sorry.

@Derek Samuelson

If you have an FHA loan now, you are paying monthly mortgage insurance. A portfolio lender should be able to get you 75% cash out, but the rate will definitely be higher than the FHA loan you have currently. You have to determine if the cash out is worth it. Portfolio rates and fees are higher than either FHA or Fannie.


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