Cash out Refi for Seller finance deal

[Jack Krusinski]

Does anyone know if you can do a cash out refi for a seller finance deal? We recently bought a property and signed a seller finance deal. However, in a few months we would like to do a cash out refi but not sure if that is possible because of a seller finance deal.

[Jaysen Medhurst]

Yes, you can, @Jack Krusinski. There are a few caveats of course. 

• Can you find a bank willing to do a cash-out refi? Many are pulling back on doing them at all right now.
• Did you add enough value to have any equity to extract? A "few months" isn't that long.
• Has the seasoning period passed? Usually 6 months on a residential mortgage, 12 months for commercial.
• Do you plan to pay back the seller? Any bank will insist on being in first position. If the seller currently is, you will need to either pay him back completely or convince him to subordinate.