All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Start here
  • Education
    Forums

    Learn from and contribute to 660K+ real estate discussions

    BiggerPockets Podcast

    Listen to weekly interviews with investors & entrepreneurs

    BiggerPockets Blog

    Delve into 8,800+ articles by experienced investors

    Member Blogs

    Read original articles by BiggerPockets members

    Guides

    Master the ins and outs of fundamental real estate topics

    The Money Show

    Listen to weekly interviews that will help get your financial house in order

    Webinars

    Sign up for this week's free webinars hosted by experienced investors or view previously-held webinar recordings in the Archives

    Videos

    Browse our library of real estate related video content

    Free Course

    Experience The Financial Independence Blueprint video series - a free four-part video series

    Topics
    Property Management Property Types Finance Strategy Finding Deals Business Operations
  • Network
    Members

    Search over 1,270,000 members across BiggerPockets

    Companies

    Explore over 31,000 real estate-related companies

    Real Estate Agents

    Find an investor-friendly agent near you

    Hard Money Lenders

    Pinpoint lenders near you with our nationwide database

    Events

    Find upcoming real estate events and meetups near you

    Jobs

    Browse real estate job opportunities in your area

  • Tools

    Calculators

    • Fix and Flip
    • Rental Property
    • BRRRR
    • Rehab Estimator
    • Wholesaling
    • Mortgage Payment
    • 70% Rule
    • Airbnb Calculator

    Services

    Find a Contractor Get a Mortgage Loan Tenant Screening External Link

    Additional Tools

    FilePlace

    Download presentations, spreadsheets, contracts & more

    REI Resources

    Dig into thousands of curated real estate tools & resources

    Calculators
  • Marketplace
    Properties For Sale

    Buy and sell real estate deals or seek out partners, financing, etc.

    Find Foreclosures External Link

    Search this comprehensive database of nationwide foreclosures

    Ads, Jobs, and Other

    Advertise your real estate business, deals, financing & more

  • Bookstore

    Featured Book

    Recession-Proof Real Estate Investing book cover

    Recession-Proof Real Estate Investing

    This easy-to-follow guide will show you how to make money during all of the market’s twists and turns! Accomplished investor J Scott dives into the theory of economic cycles and the real-world strategies for harnessing them to your advantage.

    Get the book now

    Real Estate Books

    • Flipping and Estimating Bundle
    • How to Invest in Real Estate
    • How to Sell Your Home
    • See All Books
    Real Estate Books

    Shop books covering real estate investing and personal finance.

    Lease Agreement Package New

    Don't spend $1,000 on a lawyer!

    Real Estate Forms

    Lease Agreement Package New

    Don't spend $1,000 on a lawyer!

  • Plans
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowCreative Real Estate Financing ForumArrowRe - Financing - What are the basics
  • Newest Posts Arrow Down Light
    • Newest Posts
    • Unanswered Discussions
  • Trending Arrow Down Light
    • Top Discussions
    • Trending Discussions
  • Loans & Credit Arrow Down Light
    • Local Real Estate Forums

      Real Estate Forums near you

      • Maryland Real Estate Q&A Discussion Forum 2.6K Posts 389 Discussions
      • Norfolk Real Estate Forum 350 Posts 35 Discussions
      • Norwalk Real Estate Forum 7 Posts -1 Discussions
      • Allentown Real Estate Forum 355 Posts 51 Discussions

      View all Local Real Estate forums

    • General Info
      • New Member Introductions 489K Posts 56K Discussions
      • Real Estate Not-So-Successful Stories 523 Posts 41 Discussions
      • BiggerPockets Summer Reading List 92 Posts 14 Discussions
      • Real Estate Quizzes 696 Posts 21 Discussions
      • BiggerPockets Money Podcast 675 Posts 50 Discussions
      • BiggerPockets Exclusive PRO Area 16K Posts 3.0K Discussions
      • Questions About BiggerPockets and Official Site Announcements 42K Posts 4.1K Discussions
      • FAQ Forum 132 Posts 9 Discussions
      • BiggerPockets Webinar Discussion Forum 459 Posts 15 Discussions
      • Real Estate Success Stories 77K Posts 3.7K Discussions
    • General Real Estate
      • Renters Discussion 44K Posts 5.1K Discussions
      • Buying & Selling Real Estate Discussion 424K Posts 58K Discussions
      • Do it Yourself 32K Posts 3.5K Discussions
      • Military Investing 5.4K Posts 532 Discussions
      • Construction & Remodeling Diaries 6.1K Posts 1.0K Discussions
      • Get Foreclosure Help - Stop Foreclosure Forum 6.6K Posts 910 Discussions
      • Home Owner Association (HOA) Issues & Problems Forum 6.2K Posts 910 Discussions
      • Completed Deal Diaries 5.9K Posts 2.0K Discussions
      • Investor Deal Diaries 17K Posts 862 Discussions
    • Reviews & Feedback
      • Real Estate Deal Analysis and Advice 131K Posts 19K Discussions
      • Real Estate Guru, Book & Course Reviews and Discussions 28K Posts 2.9K Discussions
      • Ask About A Real Estate Company 24K Posts 2.7K Discussions
    • Investor Basics
      • Real Estate Investor Marketing Help & Advice 46K Posts 6.5K Discussions
      • General Real Estate Investing 145K Posts 19K Discussions
      • Starting Out 291K Posts 42K Discussions
      • Investor Psychology 21K Posts 1.6K Discussions
    • Landlord & Tenant Forums
      • Landlord Forums & Rental Property Questions 359K Posts 39K Discussions
      • Mobile Homes & Mobile Home Park Investing 19K Posts 2.3K Discussions
    • Foreclosures
      • HUD, VA, and Tax Sales 10K Posts 1.5K Discussions
      • REOs 17K Posts 2.2K Discussions
      • General Foreclosure & Pre-Foreclosure Forums 33K Posts 5.2K Discussions
      • Short Sales Questions 17K Posts 2.1K Discussions
    • Real Estate Strategies
      • Tax Liens, Notes, Paper, & Cash Flows Discussion 34K Posts 3.9K Discussions
      • Innovative Strategies 27K Posts 3.4K Discussions
      • Short-Term and Vacation Rental Discussion 22K Posts 2.0K Discussions
      • Real Estate Wholesaling Questions & Answers 137K Posts 18K Discussions
      • Rent to Own a.k.a. Lease Purchase, Lease Options 15K Posts 2.3K Discussions
      • Rehabbing and House Flipping 110K Posts 13K Discussions
      • Real Estate Development & New Home Construction 19K Posts 2.6K Discussions
      • 1031 Exchanges 8.8K Posts 1.4K Discussions
    • Commercial Real Estate
      • Commercial Real Estate Investing Forum 36K Posts 4.8K Discussions
      • Multi-Family and Apartment Investing Forums 97K Posts 10K Discussions
    • Business Basics
      • Goals, Business Plans & Entities 26K Posts 3.5K Discussions
    • Real Estate Technology and the Internet
      • Real Estate Technology, Social Media & Blogging 16K Posts 2.3K Discussions
    • Loans, Mortgages, Credit Lines
      • Private Lending & Conventional Mortgage Advice 105K Posts 14K Discussions
      • Creative Real Estate Financing Forum 51K Posts 7.5K Discussions
      • Real Estate Crowdfunding Forums 5.6K Posts 384 Discussions
    • Financial, Tax, and Legal
      • Tax, Legal Issues, Contracts, Self-Directed IRA 100K Posts 15K Discussions
      • Property Insurance Questions & Discussions 11K Posts 1.8K Discussions
      • Personal Finance Forum 18K Posts 2.0K Discussions
    • Real Estate Professionals
      • Contractors 18K Posts 3.7K Discussions
      • Bankers, Lenders, and Mortgage Brokers 12K Posts 1.9K Discussions
      • Real Estate Agent Forums 47K Posts 7.1K Discussions
    • Real Estate Marketplace
      • Real Estate Events and Happenings 57K Posts 12K Discussions
      • Marketplace 227K Posts 88K Discussions
    • Off Topic
      • BiggerPockets Real Estate Investing Summit 2.0K Posts 107 Discussions
      • Off-Topic 43K Posts 5.3K Discussions
      • Housing News & Real Estate Market Discussions 15K Posts 1.8K Discussions
Start a Discussion

Re - Financing - What are the basics

2 Replies

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
  • 1
Taylor Ballam
  • 38 posts
  • 4 votes

Taylor Ballam
Creative Director from Issaquah, Washington

posted about 4 years ago

I've heard few different things about re financing and what to know what my options really are.  Are "streamlined" re finances with 0 points and minimal costs a real thing?  What are my re finance options if I purchased a house with cash?

Joe Villeneuve
  • 5.6K posts
  • 6.4K votes

Joe Villeneuve
from Plymouth, Michigan

replied about 4 years ago

Cost to do it depend on the lender.  Shop around.

If you buy a house with cash, depending on the lender (again), you will need to wait for a certain period of time (seasoning period) before they will value the house based on the other comps in the area.  Before that seasoning period is reached, they will value your house based on what you paid for it...with the "asterisk" that you can increase it with rehab...by the documented cost of that rehab.

Once that seasoning period is reached, if the comps in the area are high enough, you can get out more money in a refi than you put in (cash out refi). It's all based on the % of LTV/ARV the lender uses.

Example:  REFI right after rehab...and before seasoning period is reached

$80,000                 Sales Comps in the area
$50,000                 Cost of property
$10,000                 REHAB done
$60,000 Immediate effect of rehab on ARV
$45,000                 Amount of refi (based on 75% of ARV)
$15,000                 Cash still in property

Same as above, but this time you wait for the 6 month seasoning period to be reached

Example: REFI with rehab...but after seasoning period is reached

$80,000                Sales Comps in the area  
$50,000                Cost of property
$10,000                REHAB done
$60,000                Total cost in cash in Property
$60,000 Amount of refi (based on 75% of ARV)
$         0                Cash still in property

Same as above, but this time, not only do you wait for the 6 month seasoning period to be reached, but the Sales Comps in the area are actually $88,000

Example: REFI with rehab...but after seasoning period is reached

$88,000              Sales Comps in the area
$50,000              Cost of property
$10,000              REHAB done
$60,000              Total cost in cash in Property
$66,000 Amount of refi (based on 75% of ARV)
$ 0                      Cash still in property
$  6,000              Extra Cash taken out at time of REFI (cash out refi amount)

Taylor Ballam
  • 38 posts
  • 4 votes

Taylor Ballam
Creative Director from Issaquah, Washington

replied about 4 years ago

@Joe Villeneuve  Thanks so much for the reply.  Love the examples that I can study and work through.  I took your advice and have started the hunt to learn more about what rates and options are out there.  Thanks!

  • 1

Top Contributors

Andrew Postell
Andrew Postell
Fort Worth, TX
8.63
Score
Albert Bui
Albert Bui
Seattle, WA
8.21
Score
Joshua Mayo
Joshua Mayo
Winston Salem, NC
5.14
Score
Justin Kane
Justin Kane
San Antonio, TX
4.95
Score
Jay Hinrichs
Jay Hinrichs
Lake Oswego OR Summerlin, NV
4.75
Score

Trending Discussions

  • YOUR biggest hurdle to buying an APARTMENT COMPLEX in 2019 is...
    68 Replies
  • Rich Dad, Poor Dad--Is it too late?
    33 Replies
  • LLC - Must have or nice to have?
    91 Replies
  • $15/Hour Illinois minimum wage
    53 Replies
  • 46 units under contract in Cincinnati
    23 Replies
Close Thin

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here

Already have an account? Click here to log in

Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • Perks
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • Google+
  • YouTube
  • Instagram
© 2004-2019 BiggerPockets, LLC. All Rights Reserved.