Refinance after paying all cash...lender said it's not possible!
So I was talking to my credit union and I explained that I paid all cash for a 2nd/rental house and that after I finished fixing it up, I wanted to do a cash out refinance to get my capital back out. They said they'd be happy to do it, but they said plainly that since there is no existing mortgage, I cannot do a refinance bc there is nothing to refinance! "Fair point" I thought. They said instead that I would have to do a home equity loan...and this applied whether I lived there or rented it out. To top it off, I can only have 1 home equity loan product at a time, so it seems I cannot do more than one deal of my BRRRR strategy at a time either.
Has anyone else run into this? I don't ind doing a HEL, but i also want to keep blowing and going.
Thoughts?
Thanks,
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Using the same strategy, I just completed 2 cash out refinances last month and looking to close my third this week so it is possible. Not all banks do it and I'm hearing that less are doing it since the pandemic. I think it's more of a case that your bank doesn't do it, so they are telling you no one does.