Cash out refinance - appraisal question

[Patrick Britton]

I bought a rental with a HML and am now trying to do cash out refi. There was a pre-purchase appraisal done by the HML and i am needing a lender who will do 75% cash out refi based on that value. i dont want to pay for another appraisal.

[Alex Bekeza]

@Patrick Britton  Just want to let you know that this option does not exist outside of another hard money loan that would refinance you into another 12 month term and only do a BPO (Still a couple hundred bucks anyway)

You need to see it from the lender's perspective.  You want a loan for 75% of a property's value so of course they are going to want a third party to validate that number.  Especially when the only thing they can see is that you bought it for significantly less than you're saying its worth now only a short time ago. 

Each lender will have their own title seasoning requirements in order to give you 75% of the new appraised value and they range anywhere from 3-12 months. Even if you were doing a refinance in month 2 simply off of the purchase price + improvements a lender will absolutely require an appraisal. 

Just to drive the point home here. Even if you went through a commercial lender for the hard money purchase and they did an appraisal which included projected ARV and then you used the very same lender to do the refinance I would put my money on it that they would STILL require a new appraisal. They're not concerned with the small cost for the borrower relative to what they're are about to lend out. Finding a no appraisal option should be the least of concerns on the refinance and honestly if anyone were to do it to save you a couple hundred bucks you can guarantee the interest rate would not be desirable.