Cash Out Refi Portfolio Lenders Max LTV%?

Question

Maximum LTV% on a NOO Cash-Out-Refi from a Portfolio Lender (SFH, 2-4 units)?

Maximum LTV% on a NOO Rate-Term Refi from a Portfolio Lender (SFH, 2-4 units)?

Thanks BPN

Diana Muresan · Answer

@Brian Gerlach not sure how many financed properties you own, if under 10, then try staying on the conventional market. If you plan hokding on these properties, it’s not worth going on subprime to get 5% more cash out when interest rate will be higher, you will have 1%-2% discount/origination and you get an adjustable rate

Chris Mason · Answer

There are lenders that do. They spam my inbox (>7000 posts on a website like this in my profession = big bulls eye for everyone out there with a wonky mortgage loan product). Then I call them to go over a made-up scenario for a client that doesn't exist (I get to skip the 45m sales pitch, so it's like a 3m call for me). And they tell me things like 6.5% and 2 points, ouch.

If it was just the 6.5%, it might be worth it knowing you can/will do a rate and term refinance in six months to lower the rate back down. But that 2 or 3 points? You never get that back; so paying 2 points for an extra 10% LTV means you're giving away 1/5 of the extra money you are borrowing.

If there was something down in the low 6s at 1 point or less it might make sense. To the pseudo-HML portfolio lender reading this and thinking of spamming me, if you've got it at 80% LTV cashout no six month seasoning and 1 point @ low 6%s, by all means. But I'm pretty sure you don't exist.

Nicholas Covington · Answer

@Chris Mason I'd do it for 1 point if I got consistent business from that individual. But for these petty loan amounts of sub 75k my principal broker would be making more than I would from the loan, not worth doing it in my opinion.

It exists for the right qualified person IE 760+ credit score and loan amount between  135k-299k, SFR, 5/1 ARM, 90 days seasoning, 80% w/ 1.2 DSR. But im not a pseudo-HML portfolio lender lol.

Kerry Baird · Answer

@Chris Mason

Nicholas Covington · Answer

There are options out there for 2-4 unit rate and terms for 80% with decent rates under 6.5% - this is, of course, is not through conventional financing. There is also cash out refinancing available for 75% as well.

There are even some options out there for 80% cash out, but like stated those are going to not be conventional and their rate is higher than normal. But sometimes that extra 5% in cash is worth the rate.

You just got to work with someone that has access to those options.

Shaun Weekes · Answer

The BRRR strategy is very powerful when used correctly.  80% ltv isn't going to be obtainable unless you use Hard Money or a private lender.  This doesn't really make sense though because the lending rate and terms will be too high unfavorable in my opinion.

Delayed financing will allow for cash out at 65% on 2 - 4 units and 70% cash out after 6 months.  You can go 75% rate and term.  These numbers need to the entire base of your BRRR transaction for 2-4 units.  Next time consult a loan officer or broker that has experience with investment homes.  A good LO or Broker is key to executing this strategy with no hicups.

Take care.

Brian G. · Answer

@Shaun Weekes so no one loans at 80% LTV on a NOO Rate/Term or NOO Cash-Out? (the goal is to recapture max capital in a BRRRR)

Shaun Weekes · Answer

Oh and R&T for NOO Portfolio or Non QM is 75% for most lenders.  Fannie and Freddie both are 70% cash out and 75% R&T.

I hope this helps and have a good one.

Shaun Weekes · Answer

Most NOO Portfolio or non QM lenders will be 70% max for cash out on units.

Cash Out Refi Portfolio Lenders Max LTV%?

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