Cash out Refi opportunity
Hello BP community. I’m fairly new to real estate my wife and I are currently looking to purchase our first house together later this year. Our budget is around $250,000. While looking, I came up with an idea to help out my parents as well as potentially purchase our new home at the same time.
Little bit of background. My parents were never credit savvy like most people of their generation so what they did was a rent to own their current house. Because no bank would approve them for a large loan with their poor credit. They locked in their current house at $178,000 in 2012 and today the same house is worth $315,000 with minimal repairs needed. They have the cash for a down payment but due to COVID-19 the program the bank was offering is currently suspended.
Instead of having them keep renting and wasting the deal what I’m thinking about doing is purchasing their house for them at the price of $178,000, and then do a cash out refi to purchase a house for my wife and I.
I don’t have much experience with cash out refinancing but it seems like a home run to me.
I guess what I’m looking for is a little bit of advice. How difficult is it to get the cash out refi? Are banks even considering doing cash out refi’s due to covid? I would hate to be stuck owning my parents house and being unable to purchase a house for my wife and I. What should I expect during this process? Is it mandatory to have a 6 month waiting period after the purchase of the home to refi.
Thanks in advance! Let me know if anymore information is needed.