Cash Out Refinance Suggestions

11 Replies

Hello bigger pockets crew! I have a property in Grand Prairie, Texas that was purchased with cash back in April that I'm trying to do a cash out refinance on. This is my first refinance, and the lender I spoke with told me that I was over their limit for the qualifying debt-to-income ratio. This lender was kind of a bigger player in the industry, so I was wondering if there are any smaller "investor friendly" lenders out there that work in Texas, and people have experience working with. Also, if you have any suggestions or tips as I go threw this refinance process would be great to! Thank you so much for your time in advance!

@Tyler Maten There are commercial programs for investors who don't qualify for conventional. It happens to a lot of self employed borrowers or people with less than 2 years work history or a variety of other reasons. These commercial programs are based strictly on FICO and subject property cash flow and don't even calculate your DTI. Of course, rates are a bit higher but you can still find a 30 year fixed mortgage in the 5%-6% range. Another perk is that you can vest title in your personal name, LLC, or Corporation, whichever you prefer.

@Tyler Maten the quick answer is YES. There are niche lenders who cater to Investors and have specific loans tailored to you. 

Now the details on your scenario will determine if you can and for how much: There are multiple variables.

Appraised value, taxes owed, the current loan balance, vacant or not, Fico score, what kind of loan are you looking for. (Cash-out refi) resource, LLC vesting, No income verification no DTI, etc....

Originally posted by @Alex Bekeza :

@Tyler Maten There are commercial programs for investors who don't qualify for conventional. It happens to a lot of self employed borrowers or people with less than 2 years work history or a variety of other reasons. These commercial programs are based strictly on FICO and subject property cash flow and don't even calculate your DTI. Of course, rates are a bit higher but you can still find a 30 year fixed mortgage in the 5%-6% range. Another perk is that you can vest title in your personal name, LLC, or Corporation, whichever you prefer.

 Hey Alex, thank you for the feedback. I will look into commercial the commercial programs.

Originally posted by @Guifre Mora :

@Tyler Maten the quick answer is YES. There are niche lenders who cater to Investors and have specific loans tailored to you. 

Now the details on your scenario will determine if you can and for how much: There are multiple variables.

Appraised value, taxes owed, the current loan balance, vacant or not, Fico score, what kind of loan are you looking for. (Cash-out refi) resource, LLC vesting, No income verification no DTI, etc....

 Thank you for the response. The home is currently my primary residence, and the comps for other properties in the area just like it were going for about 185k. There is no mortgage on the home and I am looking to cash out refinance for 100k.

Originally posted by @Tyler Maten :
Originally posted by @Guifre Mora:

@Tyler Maten the quick answer is YES. There are niche lenders who cater to Investors and have specific loans tailored to you. 

Now the details on your scenario will determine if you can and for how much: There are multiple variables.

Appraised value, taxes owed, the current loan balance, vacant or not, Fico score, what kind of loan are you looking for. (Cash-out refi) resource, LLC vesting, No income verification no DTI, etc....

 Thank you for the response. The home is currently my primary residence, and the comps for other properties in the area just like it were going for about 185k. There is no mortgage on the home and I am looking to cash out refinance for 100k.

This changes what’s available for you on commercial space. This is a owner occupied witch has very different criteria to Income producing properties. 
Since it's your primary residence your DTI will be calculated to qualify for the loan and the purpose of the loan must be business purpose.
Whats your DTI % and how do you document income?

Originally posted by @Mike Burkett :

@Tyler Maten Since it is your homestead, you will need to work on your DTI. I'm not aware of any commercial loans that will work on that property. Happy to answer and questions for you.

Hi Mike, Do you know any commercial property mortgage lenders who don't make you wait for 6 months before refinancing your rehabbed property?

I need that like yesterday. Thanks 

 

@Tyler Maten I've seen this before where some lenders will have a lower DTI threshold than other lenders. I don't know if you know the answer here (or if you want to even post the answers since they might be personal) but did they tell you what their DTI limit was? And do you know what your DTI is? Honestly I feel this should be spoken about offline but answer how you feel most comfortable. But most certainly have seen some lenders deny someone...that another lender has been 100% ok with. That COULD be the case here. I feel it's certainly worth getting another opinion from a local lender.

@Laurence Obi are you needing a cash out loan because you purchase a home with cash?  Or do you need a cash out loan that you purchased a home with a loan on?  If you don't mind responding that will allow me to provide the right information for you.  Thanks!

Originally posted by @Andrew Postell :

@Laurence Obi are you needing a cash out loan because you purchase a home with cash?  Or do you need a cash out loan that you purchased a home with a loan on?  If you don't mind responding that will allow me to provide the right information for you.  Thanks!

Here are the details:

Home purchase was financed using a PML. Wana refinance to:

- Reduce interest rates becuz it's a 13 month tenure loan at 8.99% APR

- Take out some cash for next rehab.

dont know if this makes sense

 

@Laurence Obi ah, makes sense.  Some follow up:

  • What do  you feel the home is worth? Estimation is fine for these purposes.
  • What is the approximate amount you owe on the private loan?

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