Can I Get Financing by Getting a Loan That Pays Off a Second-Position Loan?

Question

I have a cash-flowing property with roughly 50% equity, and a 100k HELOC in 2nd position. Can I get a new loan that encompasses the remaining balance, equity, and the HELOC, and gives me the remainder in liquid cash?

Use case: home is worth $580k-630k, with $295k balance on loan, and $100k owed on HELOC ($395k total debt). I would like to finance $600k-$700k total, to pay off all of the above, plus finance a BRRRR/HH purchase for less than $300k. Is this possible?

Joesiann Cortez · Answer

It sounds like a refinance would be a good option for you, but I'd just make sure with our current interest rate options out there that the monthly payment on that new loan would makes sense.

Chad Davis · Answer

@Adam Davis This is certainly possible. DSCR option may be a good option. Happy to take a look.

Devin Peterson · Answer

Hi Adam, Yes this is possible as an investment cash out refinance. You will find lenders out there who have different max leverage requirements 75-80% lt cash out depending on DSCR, seasoning, FICO, etc.

Jason Wray · Answer

Adam,

Yes, I would suggest you refinance to pay off the heloc and take out some cash through a cash out refinance. Even if you use the $580K and go 75% LTV it pays off your $295k + $100K and there is cash left over.

Can I Get Financing by Getting a Loan That Pays Off a Second-Position Loan?

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