Cash out Refinancing

3 Replies

Hello all, not sure if this is the right place to post this question. But in terms of cash out refinancing when shopping around and calling local banks what questions should I be asking? And what exactly should I be looking for? I reached out to a local bank that gave 6 months waiting period before a cash out refinance. Closing cost of $3,500 and appraisal being around 4/500$ is there anything I’m missing?

@Andy Gaskin it sounds like we are speaking about an investment property (let me know if it's something different) and if you are looking for the best terms and rate for a loan that will come from a Fannie/Freddie type of loan.  Those loans will have a lot of rules but the rates are the best (at least as of this post date).  They have 2 basic rules when receiving cash on a home that was just purchased:

  1. You can only take cash out in the first 6 months if you purchased the home with cash (or a HELOC)
  2. When you do take cash out you will be limited to 75% of the property value (with a single family investment property)

So if you don't want to follow those rules that means you would need to seek a different loan option. Commonly, the other loan type is called a portfolio loan or maybe a commercial loan. Now portfolio/commercial loans come from the bank's own money (as opposed to getting the money from Fannie/Freddie). So each and every lender could have an entirely different set of rules. Some might go up to 80% of the ARV...some might only go up to 70%. Some might require no time on title....some might need 12 months. It can run the gambit. If this is the loan type you are seeking I would suggest posting this in the New Jersey forum. Maybe some local people can help guide you to some lenders that have better terms that others. Do expect these loans to have a higher rate, or maybe an adjustable rate, or maybe even be a 20 year loan (which would make your payment higher because you have to pay it back sooner)....and sometimes all 3 of those.

Hope this helps in some way.  Feel free to tag me with any additional questions.  Thanks!

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