Nashville, TN · Member since 2020 · 17 posts · 8 votes
The details:
I have a single family with long term renters. Lots of equity. Current mortgage is about $120K. Home value is somewhere in the $280k range.
I'm going to start talking to local banks, but I wondered if any of you have done something similar recently? If so, what was your new rate, and did you do cash out, or simple refi? Did you pay any points?
Hi @Josh Gregory, I love the move to redeploy that equity!
@Forrest Faulconer just did this in our market. Hey Forrest, what'd your numbers look like in your cash-out refi?
Hey Josh! Now is the time to do a cash-out refi, we had about 105k of equity in our house, pulled out 75% of that, and was able to lock in a rate of 2.99% (our original rate was 3.875%). So we essentially pulled a good chunk of change out and lowered our rate, thus lowering our monthly payment around $120. Win-Win!
Hi @Josh Gregory, I love the move to redeploy that equity!
@Forrest Faulconer just did this in our market. Hey Forrest, what'd your numbers look like in your cash-out refi?
Hey Josh! Now is the time to do a cash-out refi, we had about 105k of equity in our house, pulled out 75% of that, and was able to lock in a rate of 2.99% (our original rate was 3.875%). So we essentially pulled a good chunk of change out and lowered our rate, thus lowering our monthly payment around $120. Win-Win!
Lender · Peoria, AZ · Member since 2018 · 77 posts · 25 votes
5y
Other thing I would consider is a HELOC. Primarily if you have a rental but dont have somewhere you have to deploy the capital right away you can get a Home equity line of credit and be ready to jump on a deal that may come up.
@Forrest Faulconer I work as a mortgage broker and am curious do you know what the point cost was and the name of the lender?
@Forrest Faulconer That's exactly what I'm thinking. Appreciate your response.
@Greg Dorn That is a great option as well. I've got a HELOC on my primary already that I use for building spec houses, so it only goes up to full balance intermittently. Current rate is 4%, but I've seen it as high as 6%, and I know it can possibly ho up higher than that. If possible, I'd like to lock in a lower rate on cash out, long term on my rental property, and still use the HELOC on my primary only as needed. What kind of rates are you seeing (and points) on a cash out refi in this scenario. Assume 800+ credit score.
Other thing I would consider is a HELOC. Primarily if you have a rental but dont have somewhere you have to deploy the capital right away you can get a Home equity line of credit and be ready to jump on a deal that may come up.
@Forrest Faulconer I work as a mortgage broker and am curious do you know what the point cost was and the name of the lender?
Hi Greg, no points, lender was Valor Bank out of Edmond, OK. Are you looking a lender? They are a small local bank with competitive rates. If you send me a message I can put you in contact with the right person.
Lender · Peoria, AZ · Member since 2018 · 77 posts · 25 votes
5y
So I am not looking for a local lender in that market as I am working in my own local market for the next little while. For cash out investment property mortgages I have not seen incredibly competitive Conventional loans (at least compared to owner occupied loans) so portfolio held loans from a local bank may be the best option for you @Josh Gregory. Best of luck
Lender · Long Beach, CA · Member since 2013 · 496 posts · 296 votes
5y
I agree with @Greg Dorn, investment loans have not recovered from Covid crisis, lenders don't wan't them yet (along with self-employed). You will probably by upper 4% to low 5% for an investment cash out refinance right now. Not horrible, but compared to 2.875% (what I'm doing owner occupied cash outs right now), it pales in comparison.
Rental Property Investor · Henrico, VA · Member since 2019 · 265 posts · 155 votes
5y
@Josh Gregory just completed a recent cash out refi going from 5.5% to 3.65% investor rate 30 yr fixed with 75% LTV, pulling out $53k. I believe there were 2 points but would have to double check, the loan amount wasnt terribly large though so I was ok with that. It was rented continously for 2 years. This was in Virginia and closed last month through a broker.
Investor · Warwick, RI · Member since 2015 · 137 posts · 100 votes
5y
Hey Josh, I just did a Cash-out Refi on one of my rentals. I did a 75% LTV. My new rate is 3.6% from 5.25% with 0 points, I ended up pulling out 45k which was what I put in when I bought it and now I'm using that 45 k as a down payment on another SFH. Love the BRRR method!
@Alex Forest even with 2 points, that doesn't sound terrible, if you're going to hold long term.
Yes, the downpayment and all in fees 2 years ago was $30k, with improvements since that time covered by cash flow, so in the grand scheme of themes dont mind the ~$3k in points charge to get that downpayment plus some back. Though, no points per Bob would be even better!