Cash out refi?

[Devin Cohan]

First and foremost I appreciate all of those who lend their knowledge/expertise to this inquiry. I have listened to countless podcasts and read many posts and the subject of cash out refi to obtain capital to reinvest is prevalent. I want to know the basics of the cash out refi process. I purchased my primary residence 4 years ago and have built roughly $30,000 of equity with $5,000 cash, some sweat equity from my father in law and myself, and a modest amount of appreciation. I plan to begin my REI career, following this unintended house hack, by rehabbing another property and want to know if I should sell my primary or cash out refi and rent it out? I am not asking for a direct this or that answer just some info on the refi process to make an educated plan of action.

[Shedrick Nettles]

Hello David,

Cash out refinance holds many opportunities if you have a definitive course of action and exit strategy or repayment plan. Keep in mind that you are removing a considerable portion of the equity out of the property and getting a new first lien against it. Sometimes borrowers are faced with too many options after cash out refi and it makes for a difficult time in staying the course on an already income producing property because of the current mortgage. The process for a cash out refi should be pretty simple and straight forward and should not have an exorbitant amount of fees or upfront cost. Normally you would pay for an appraisal and maybe non owner occupant insurance if you don't already have this but other than that depending on your source the whole process shouldn't take more than 30 days to cash in hand. I have a few sources that I work with directly if you are interested. Rates are low and there is no tax return required. You do need a 650 mid fico to qualify but other than that there is not much else. If you need help, let me know.