Cash-out Refi Interest Rates

40 Replies

Hello everyone, Like most investers right now I'm trying to do a Cashout Refi.  I've spoken to about 5 lenders and I've gotten a vast amount of responses to my attempt to Refi.  Some lenders have told me that they are staying far away from investment properties.  The other 3 lenders gave me different interest rates.  One lender quoted me 4.6%, one said they could do it at 3.1% (which sounds like bs) and another told me 3.8 that would cost me 1 point.  

My question is what is a good realistic rate on a cashout refi?  What is bad deal on a cash-out refi?  Has anyone (lender or borrower) done a cash-out recently?  What is the current market for cash-outs right now?

Thanks to all those who reply.

@Mel Hayes, the rate that you will get will likely be driven by a number of different factors; for example: (1) your credit score, (2) the type of property (SFH, duplex, etc.), (3) the size of the loan, and (4) the DSCR. It's hard to comment on a good/realistic rate in general terms because various factors will impact the rate.

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Just recently tried to get quotes for cash out for my rental SFR, MV=$130K, to get $100K.

One lender said approximately 4.8% with 2 points, closing cost about $4700, another 5.7% with one point, haven’t asked about closing.

MyFICO 800+, the house is in my LLC free&clear.
id like to know if there are lenders on cash out for rentals at 3.5% especially no points. I was told that there is no such thing as no points investment loan

Market rates for cash out refis my competitors and I are offering are typically within the 4% - 5.5% range with points for 65% - 75% LTVs. Rates are sensitive to credit and LTVS. 

I do not think that the lender offering 3.1% is likely illegitimate (sounds too good to be true) and, if they are legitimate, they must be more akin to a traditional bank which takes 60+ days to close.

@Mel Hayes

I did my cash out refis about a year ago, so my numbers won't help you.  However, I will say that I bounced the idea of higher rates off of my lender (we're looking to do some purchases right now) and he said that it has a lot to do with the portfolio of loans that lenders are currently holding, so it may be possible to get better deals than you realize if that's true.  Having said that, I love my guy, but have no idea of the accuracy of his claims.  When we discussed this about a month ago, he said that his companies portfolio was in pretty good shape and was able to offer lower rates than some of their competition at that time.  Again, I have no idea of how accurate any of this is and I'm sure that people with a better idea can chime in. 

I'd be happy to send you his number if you pm me though.  I've sent him several people and they've all been really impressed with him.

Best wishes

@Mel Hayes , you'd be better off getting quotes from another 5 lenders rather than asking other members. Try Network Capital and Angel Oak Home Loans. I'm not sure if they operate in CA but I've gotten good deals on cash out refinances of investment properties with them before

3.25% is a great rate but would not be available on a SFR held in a corporate name as she described. If you refi'd at 3.25% you're holding title in your personal name. We could do a whole thread on why that's not optimal but if you have an SFR in Napa as a rental there's a 100% chance you're violating the 1% rule too!

Originally posted by @Courtney Young :

We just did one in Napa on an investment and got 3.25% with cash out. We paid for a point. 

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I got 2 cash out refi done last month at 3.375% they were both investment and duplex and a triplex. In Bakersfield CA. If you are paying more than 3.875% you are pretty much getting scammed! :)

Originally posted by @Vince Rodriguez :

I got 2 cash out refi done last month at 3.375% they were both investment and duplex and a triplex. In Bakersfield CA. If you are paying more than 3.875% you are pretty much getting scammed! :)

Not really……the rates are different for different states, different prices of houses, as well as they depend on personal credit, assets, DTI

If your duplex market value is around $500K and my fourplex $200K - we will have different rates. California and Ohio never had the same APRs, never will.

Location is very important- after all, we’re talking real estate…financing

@Vince Rodriguez

Congrats Vince on the two refi's. My properties are not located in California and I'm not sure what your credit score is but that is another factor to consider.

I just got another quote for 3.875% with one point at 75% LTV. This actually the best rate so far in my opinion.

How do you guys feel about paying points for lower rates?

Paying points for a lower interest rate is more relevant to what your exit timeline is.  If you're going to be exiting out in a year or two it probably doesn't make much sense, if you anticipate holding for 5-6 years than it may make more sense to go that route.

In WI right now quotes I've been seeing have been 75-80% LTV we're in the mid to high 3% range with no points on commercial loans with a 5,7, or 10 year balloon and 20-25 year amort.