Refinance owned home

[Michael Frigioni]

I am new to real estate I own a couple homes outright no payment, I want to refinance it to buy more property, I don't have alot of money on tax returns so is my only option one of these high interest private cash out refinance loans?

[Reid Chauvin]

Hi @Michael Frigioni - it's going to depend on how much income you have (including your job and your rental income) vs your monthly debt obligations (including the prospective mortgage(s)). If your monthly income is a greater than your monthly debts by a certain amount, then you will qualify for the conventional financing (assuming you meet the other requirements). If you don't have enough income, then the alternatives are not THAT much more costly. A loan officer can run an analysis for you pretty quickly to help you understand your options. Feel free to reach out if you'd like further assistance! 

[Andrew Garcia]

Hi @Michael Frigioni, hello from MD!

Using private money is far from your only option. It all depends on what your tax returns show and how much other debt that you have for conventional financing. 

If you cannot go that route, you can use other loans called non-QM loans that have a slightly higher interest rate but it is not obscenely high. The interest rate is typically .5-1% higher on these types of loans, depending on the type and borrower profile.

Hope this helps! Let me know if I can be of any assistance.

[Matthew Crivelli]

@Michael Frigioni

The loan you are looking for is called DSCR Loan, (Debt Service Counter Ratio) these loans don't require the borrower to be employed, have DTI restrictions, or tax return requirements. The downside is the interest rates & closing costs are higher than what a bank would have to offer.

The properties will need to be rented and they must be able to cashflow. You will also need a good credit score attached to the loan (you or cosigner) and you will need some cash reserves in place. 

If you feel these requirements could be met a 30 year cash-out using a DSCR loan may be a great option for you. You may be able to pull as much as 80% LTV! Feel free to reach out!