Refinancing out equity

[Maxwell Kaplan]

I've heard and read multiple sources talking about refinancing loans when their equity goes up and pulling out cash. In Massachusetts, this seems relevant with properties growing in value at 3-5% year over year. When people are refinancing their loans are you pulling out the equity(in cash) on the accumulated equity that is over 20% so that you eliminate PMI as well as get cash out? What's the best way to go about this?

For my particular situation, I am purchasing my first 3-family with FHA loan or Mass Housing loan. My thought is go in low money down because appreciation is happening so quickly I could refi out of the PMI. Although putting down 10% does seem to make the cash flow more attractive

[Cameron Tope]

@Maxwell Kaplan what's your strategy or goal with the property? Cash flow? Leverage for next property? Education? 

I've refinanced many properties and the most I've found a bank to do is 80% LTV, so odds are you won't have to pay PMI after the refinance.

However, if this property negative cash flows while you're waiting to refinance, are you okay with that? 

I love appreciation but I never, ever make a bet that I'll get it. You never know what the market could be doing when you want to refi. 

Hope that helps!