Cash Out Refinance on Investment Property

Illinois Real Estate Q&A Discussion Forum

Cash Out Refinance on Investment Property

Rental Property Investor · Chicago, IL · Member since 2019 · 12 posts · 3 votes

Hello!

I have a non-owner occupied investment property in Lansing, IL and am looking to do a cash out refinance on this property. Two lenders have indicated that they are not doing this due to Covid. I would really like to take advantage of the low rates and use the funds to add to my portfolio. Is there anyone here that can help or guide me in the right direction.

Thank you in advance!

-Wsam

1 Reply

18 views

Most Popular Reply

Zack KarpPro Member

Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes

@Patrice Boenzi that's interesting, I am seeing the opposite. With higher sales comps, appraisals have been coming in higher than expected. Turn times are longer than usual, but usually a happy ending and worth the wait.

And if a lender is retracting on what they promised, I would run. Either your LO is incompetent, or the lender is pulling a bait and switch, either way that's not cool. Hopefully that's not one of your preferred lenders...

847-387-5513

2 Reply

See this reply in the discussion

11 Replies

Jump to latestLatest

Sort by

Constance Grandelli
Realtor · KINGSPORT, TN · Member since 2015 · 96 posts · 34 votes
6y
Hi, I would suggest keep shopping for lenders - specifically your small hometown banks. If you have a W2 income & decent credit, it shouldn't be a problem. If you can show rent history, that's helpful.
Good luck! :0)
1 Reply
Patrice Boenzi
Real Estate Agent · Geneva, IL · Member since 2015 · 403 posts · 172 votes
6y
@Wsam Taiym There are some lenders that are doing it, but the banks are tightening up criteria. I am in the process of doing a cash out refi on one of my duplexes and when I started they told me I can pull out up 25%. Now we are in week two of the process or maybe week three and now they're telling me I can only pull out 15%. The other thing we are seeing Is that the appraisal amounts are coming back very low. My appraisal on my duplex came back significantly lower than market value to the point where I probably will not go through with the refi. In the regular selling market we are seeing that prices are being pushed by sellers and buyers are purchasing, but appraisals are coming back low. I have heard of some banks stopping equity lines on investment properties. When Covid started they suspended the rehab loans and IDHA (the loan assistant program) but I am seeing that some of my lenders have brought back those programs. We are also seeing FHA loans starting to default which is an indicator that in the next few months we will see foreclosures and short sales again.
1 Reply
Erica Larence-Penna
Attorney · RI · Member since 2019 · 157 posts · 93 votes
6y
@Wsam Taiym reach out to @Elise Marquette. She's still doing cash out refis and is awesome!
1 Reply
Alex BekezaBusiness Member
Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
6y
@Wsam Taiym There are commercial options offering 30 year fixed on non owner occupied properties and going as high as 70% LTV cash out. (supposedly 75% soon). These were gone from April-Early June or so but are once again available.
[email protected]818-606-8823
Investor Property Loan5306 Reviews
Website View Page
1 Reply
Zack KarpPro Member
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
6y
@Wsam Taiym it's business as usual over here, there are no cash out restrictions with covid, that's definitely a lender overlay. Clearly you're talking to the wrong lenders.
847-387-5513
1 Reply
Zack KarpPro Member
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
6y
@Patrice Boenzi that's interesting, I am seeing the opposite. With higher sales comps, appraisals have been coming in higher than expected. Turn times are longer than usual, but usually a happy ending and worth the wait.
And if a lender is retracting on what they promised, I would run. Either your LO is incompetent, or the lender is pulling a bait and switch, either way that's not cool. Hopefully that's not one of your preferred lenders...
847-387-5513
2 Reply
Patrice Boenzi
Real Estate Agent · Geneva, IL · Member since 2015 · 403 posts · 172 votes
6y
@Zack Karp that is interesting. I haven't had any of my listings come back low, but have heard from several other agents that has been their experience. My refi was in Michigan. They are definitely taking longer. Are you seeing surveys behind? An attorney was telling me those are also taking longer than normal. Are you seeing the 203k loan being offered again? What are you hearing about FHA loans and looming foreclosures?
1 Reply
Zack KarpPro Member
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
6y
@Patrice Boenzi I don't have a pulse on survey turn times, but everything is taking longer than usual because of all this volume. Yes 203K's have been back for a few months. Foreclosures won't start cycling through for a couple years imo. By the time the government even allows lenders to foreclose again, and the time it takes for that foreclosure process, it could be 1-3 years before we see actual foreclosed properties. It's not just FHA loans, it's all loan types.
847-387-5513
1 Reply
Wsam Taiym
OP
Rental Property Investor · Chicago, IL · Member since 2019 · 12 posts · 3 votes
6y
Thank you all for the feedback!
0 Reply
Zach GringPro Member
Realtor · Saint Charles, IL · Member since 2020 · 126 posts · 101 votes
6y
@Zack Karp
What are your ltv% and interest currently? I have a property I may do a cash out on.
[email protected]630-373-2554
0 Reply
Zack KarpPro Member
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
6y
@Zach Gring Fannie Mae and Freddie Mac set the max LTV's. For an investment property cash out refi, it's 75% for a 1-unit and 70% for a 2-4 unit.
847-387-5513
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.