No-Seasoning Cashout-refi .... Confused
There is something that I am confused about , and that is the following ...... " The New Loan amount must NOT be more than the borrower's initial investment in purchasing the home + you can finance the Closing Costs . Initial Investment is defined as the Sales Price, NOT the Sales Price + the Cost of Improvements done to the property "
So from the above statement, this seems to mean that the New " Cash Out " loan can NOT equal more than the Initial Purchase price for the property + the Closing Costs ?
Also, if the Property is an Owner Occupied , what is the max LTV that I can expect ..... 85% ? 100% ?
What I am not understanding is ..... How do you get Actual Cash out of your property, if they will only Loan/base the amount of the Cash-Out refi on the Purchase Price , nd Not on what the properties ARV is ?
Example .... If you purchase a property for $60,000 ( includes Closing Costs ) ,
and they will do a LTV for the Cash-Out of 85% , this would be $51,000
So where does the Cash you can get come from ? You are in the " Negative " by $9,000
If the 85% LTV was based on the ARV ( say $80,000 ARV ) , then I can see where there is Instant $ to get from the house , as a Cash-Out ..... $8,000
Just a bit confused as to how this process works. Thank you for the help