Cash out refi for non owner occupied property

4 Replies

Lenders... if I buy an investment property that appraises for $125k for $100k cash, could I do a cash out refi and get 80% (my $100k) back out?

I'm not a lender but I've done what you're asking in Western NY through Key Bank back in 2016. Rate was only about 1% higher than if it were my primary residence. 

Not so simple answer, yes and no.  For a conventional mortgage (Freddie/Fannie) not likely, though you could borrow 75% of your purchase price, so cash out $75K minus any associated costs/fees.  Research “delayed refinancing” which generally requires 6 months of seasoning (ownership) in order to use appraised value vs purchase price (plus improvement expenses). 

Private money/Commercial lenders who are not bound by Freddie/Fannie rules often will let you borrow right away with little or no seasoning (often 1-30 days after purchase) and borrow 75% LTV of appraised value, but rates are often more like 6-9% vs about 4-5% for conventional financing (Freddie/Fannie backed loans).

I hope this helps. I’m just an experienced borrower who has done a lot of shopping rates, fees, and terms.  Feel free to private message me for additional discussions. 

Andrew
 

I work with a local bank and they do 80% LTV on commercial refi at 6%. I don't know what their personal loan terms are. But based on your numbers at most you'll get $100k - refi costs and fee. So more like $95k in your pocket assuming their appraisal is $125k

Originally posted by @Shaun R. :

Lenders... if I buy an investment property that appraises for $125k for $100k cash, could I do a cash out refi and get 80% (my $100k) back out?

SFR 75%, 2-4 unit 70%. Directly from Fannie and Freddie.