Cash-Out Refi to pay off high interest debt?

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Cash-Out Refi to pay off high interest debt?

Nick H.
Somewhere warm · Member since 2017 · 20 posts · 7 votes

Looking for some advice. I'd love to get into REI, however I feel like my high interest debt is weighing me down. I'm continuing to pay it off as much as possible but feeling stuck. Considering the COVID situation, looking to take advantage of the low rates and also get rid of debt.

Here's my situation:
1st mortgage: $101,xxx
2nd mortgage: $38,xxx
CC debt: $38k
Loan debt: $20k
Zillow 'Zestimate Range': $228k - $252k

My local CU lists up to 95% for cash-out refi. 

Assuming low end value of $228k / 95% would be around $75k.
Assuming low end value of $252k / 95% would be around $98k.

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Jaysen Medhurst
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y

I would be absolutely shocked if you could get a cash-out refi with 95% LTV, @Nick H. Have you confirmed that product is still being offered with the CU? 

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  • Jaysen Medhurst
    Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    6y

    I would be absolutely shocked if you could get a cash-out refi with 95% LTV, @Nick H. Have you confirmed that product is still being offered with the CU? 

    2Reply
  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    6y
    Originally posted by @Jaysen Medhurst:

    I would be absolutely shocked if you could get a cash-out refi with 95% LTV, @Nick H. Have you confirmed that product is still being offered with the CU? 

     I've seen several cases where a lender or bank stopped offering a product, but their website still says it does, and I have to show the borrower a news article where they held a press conference (or whatever) announcing that they no longer offer it. 

    I was going to use Wells Fargo's HELOC as an example, but it appears that they finally updated their website to have a "COVID-19 Update" that they are out of the HELOC business.

    The little regional banks and credit unions will always lag a bit -- it would not surprise me at all if that 95% c/o product went away 2-3 weeks ago, but the "non-essential" website update people have not updated it yet. 

    1Reply
  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    6y

    Yes, worth pursuing, even at lower LTVs.

    Now the tough love...it's hard to get ahead financially when in a cycle of debt.

    1Reply
  • Nick H.
    OP
    Somewhere warm · Member since 2017 · 20 posts · 7 votes
    6y
    Originally posted by @Mike Dymski:

    Yes, worth pursuing, even at lower LTVs.

    Now the tough love...it's hard to get ahead financially when in a cycle of debt.

     Thanks Mike. Definitely have learned from my mistakes. Sometimes you need to play with fire to really learn I guess 🤦🏼‍♂️

    1Reply
  • Nick H.
    OP
    Somewhere warm · Member since 2017 · 20 posts · 7 votes
    6y
    Originally posted by @Chris Mason:
    Originally posted by @Jaysen Medhurst:

    I would be absolutely shocked if you could get a cash-out refi with 95% LTV, @Nick H. Have you confirmed that product is still being offered with the CU? 

     I've seen several cases where a lender or bank stopped offering a product, but their website still says it does, and I have to show the borrower a news article where they held a press conference (or whatever) announcing that they no longer offer it. 

    I was going to use Wells Fargo's HELOC as an example, but it appears that they finally updated their website to have a "COVID-19 Update" that they are out of the HELOC business.

    The little regional banks and credit unions will always lag a bit -- it would not surprise me at all if that 95% c/o product went away 2-3 weeks ago, but the "non-essential" website update people have not updated it yet. 

    Thanks for your reply!

    I made sure this was the rate before posting the question.

    1Reply
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