Hadn't counted on this curveball - refinance woes
In July, my husband and I invested $112,000 in a single family home. We financed it through a mortgage company with 20% down obtained by selling stocks. After putting $3500 into it, the home is now valued at $150,000.
We are now under a due diligence contract for a $190,000 4 plex and planned to refinance the first one to pull the equity out for 20% on this purchase. Lender says I have to wait A YEAR to do a cash-out refinance. Not sure how I missed that little detail. Now we are faced with pulling funds from 401K (we are over 59 1/2 - tax but no early withdrawal fee) to cover the down-payment and cost to finance.
Where did we go wrong? What should we have done? Is it too late to go another direction?
Most Popular Reply
HELOC property #1. The bank will give you a equity backed loan with a balloon payment in the future up to 70% of the ARV. The only problem is that you will now have a payment against it if you spend it (which you would on the down payment for property #2) and you will have difficulty (I think) refinancing property #1 in the future with a active HELOC on it.