I am looking to do my first cash out refinance but I have a couple of questions. I don’t know the worth of the house. I had an appraisal done about five years ago but we have another bedroom to count now in terms of comps. My question is, can I get my own appraisal before refinancing and would it be valid if I did? I’d like to know my loan to value ideally before getting into the process. Also, how is the lending scene looking for cash out refinances on a rental?
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6y
@Nina Shell I would talk to an agent to pull comps for you. You could hire an appraiser, but the bank likely won't use your appraiser. If you plan on using a conventional (fannie or freddie) loan, the bank cannot pick the appraiser, it will be assigned through some system. But a broker price opinion should give you a ball park. That being said, be sure you are looking at their comp set, because I know some agents that get really aggressive on pricing, and for a cash out refi, your appraisal will likely lean conservative.
As far as it being a rental, do you own in your personal name or LLC? If LLC, you will be on the commercial side of the bank and generally terms are not as good: shorter am, shorter terms, higher interest. If personal, you just need to find a lender that will do conventional, non-owner occupied mortgages, but you can find 30 yr fixed, lower rate mortgages.
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6y
@Nina Shell I would talk to an agent to pull comps for you. You could hire an appraiser, but the bank likely won't use your appraiser. If you plan on using a conventional (fannie or freddie) loan, the bank cannot pick the appraiser, it will be assigned through some system. But a broker price opinion should give you a ball park. That being said, be sure you are looking at their comp set, because I know some agents that get really aggressive on pricing, and for a cash out refi, your appraisal will likely lean conservative.
As far as it being a rental, do you own in your personal name or LLC? If LLC, you will be on the commercial side of the bank and generally terms are not as good: shorter am, shorter terms, higher interest. If personal, you just need to find a lender that will do conventional, non-owner occupied mortgages, but you can find 30 yr fixed, lower rate mortgages.
Investor · MD/DC · Member since 2020 · 37 posts · 43 votes
6y
@Nina Shell, @Evan Polaski is right, banks can't even pick their own appraisers, let alone use your appraisal. My commercial bank (non fannie/freddie) uses a blind bid for appraisals to prevent fraud. On top of that, I have seen appraisals vary +/- 10% depending on the appraiser, so the only appraisal that really matters is the lenders.
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Nina Shell Ask your realtor to run some comps for you. If the numbers work well at 70-75% LTV for the refi, begin shopping for an investor savvy conventional lender. There are ones doing refis right now (though I have yet to see commercial come back online). I'm personally finding the refi easier than the HELOC. Let the lender order the appraisal so you aren't paying for one twice. Once you close, you can think about transferring title to an LLC (not a lawyer so be certain to consult with one). PM me if you have any Qs! Good luck!