Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
I'm not a banker, nor do I broker mortgages or get paid any compensation to refer those seeing to refinance.
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I believe that many markets are now peaking.
Now is an excellent time to get access to the equity you've built up through a cash out refi (rates low, property prices high). Then hold on to the cash and wait for the next buying opportunity in your market once prices drop OR invest in another market close to or near a bottom.
I'm not a banker, nor do I broker mortgages or get paid any compensation to refer those seeing to refinance.
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I believe that many markets are now peaking.
Now is an excellent time to get access to the equity you've built up through a cash out refi (rates low, property prices high). Then hold on to the cash and wait for the next buying opportunity in your market once prices drop OR invest in another market close to or near a bottom.
Generally speaking, does a cash out refi have different requirements than a standard refi (for instance, cash out + lower rate, vs just locking in a lower rate.) We're at 4.5% at the moment, but it seems like 30yr refis have dipped back down to below 4 with no points. Not a big difference but I do have some equity to free up that can be used towards a future down payment.
My biggest issue is that I have great credit and would be more concerned about the potential negative effect of a credit inquiry, and might be better served simply using the good credit (as is with no further inquiries) in order to borrow a bit more (instead of a refi for extra down payment money). I know the new higher balance will show against my debt to earnings, but a lower down payment means I'll have to deal with PMI which would make most deals negative cash flow.
The terms are similar/the same, although each lender will have slightly different terms on what they can provide. I've found that most lenders will do 75% LTV on the new appraised value. If you already have a decent rate (4-5%), I wouldn't consider doing this at the moment to obtain a lower rate, but to access your equity and pull cash out.
I'm not a banker, nor do I broker mortgages or get paid any compensation to refer those seeing to refinance.
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I believe that many markets are now peaking.
Now is an excellent time to get access to the equity you've built up through a cash out refi (rates low, property prices high). Then hold on to the cash and wait for the next buying opportunity in your market once prices drop OR invest in another market close to or near a bottom.
If you think the market is going to drop, wouldn't you be better off selling? A cash out refi is great until the loan reaches maturity and you can't sell or refinance. That's what happened in 2008.
You make a great point. Availability of financing definitely shield be considered, but I think it's a good time to be thinking about this and prepare for next buying opportunity.
Some of my clients have credit scores in the low 600s and still get double digit million dollar loans. Build your portfolio, experience and liquidity and credit score becomes ALMOST insignificant.
Some of my clients have credit scores in the low 600s and still get double digit million dollar loans. Build your portfolio, experience and liquidity and credit score becomes ALMOST insignificant.
I look forward to the day I'm one of your clients with an insignificant score :) Until then, I'm trying to figure out how to make it one of my assets as a beginner. I certainly see the enormous advantages those with tons of equity have. Unfortunately my loan is too young,