Rental Cash Out Refi in Portland OR

Private Lending & Conventional Mortgage Advice
10yFollow

Rental Cash Out Refi in Portland OR

Isaac Frost
General Contractor & Investor 路 Portland, OR 路 Member since 2013 路 46 posts 路 33 votes

Does anyone have a great source for got rate, low closing costs on a cash out refi for a rental property in Portland??  

So I just went through underwriting for a refi on a rental property my wife and I own.  I'm reviewing the final loan docs and I'm concerned that we're' not getting the best deal we could be.

Here's what I'm being quoted:

Appraised value - $608k

Current loan balance - $158k

New Mortgage - $400k

Closing Costs - $15k

Rate: 4.25% at 30 year fixed

Cash After Closing - $227k

Credit Score - 805

I was expecting a rate in the 3.5-4% range and the closing costs seem very high.  Are there better options out there?  I don't want to mention the bank that I got the quote from but it's a smaller regional bank that has the same name as a really great local ice cream company : )

1Reply
13 views

Most Popular Reply

Robert Blanke
Banker 路 Schaumburg, IL 路 Member since 2016 路 1 post 路 1 vote
10y

Yes, 15k in cost at that rate is crazy. Cash out, investment, FICO score and LTV will always factor the rate. Isaac if you would like please PM me and I can offer more information

1Reply
See this reply in the discussion

12 Replies

Jump to latestLatest
  • Jessica S.
    Real Estate Agent 路 Portland, OR 路 Member since 2013 路 154 posts 路 67 votes
    10y

    Hey Isaac,

    I'm not totally up on current rates but 4.25 sounds about right.  (Investment properties have higher rates than owner-occupied, sadly) But 15k in closing costs?? WTF???

    Here's what you need to do:  find another lender, doesn't matter who it is, show them lender #1's quote and tell them to beat it.  Then go back to Umpqua and do the same thing with them.  Go back and forth until you get them down as low as you can.  Then if you're really dedicated, find lender #3 and repeat.  It's painful and you will feel like an a$$hole, but it will save you a ton of money.

    I used this strategy a couple months ago and ended up paying a total of $2,200 in closing costs, including $1,500 in pre-paid property tax which I was going to owe anyways.

    So, yeah...

    0Reply
  • Isaac Frost
    OP
    General Contractor & Investor 路 Portland, OR 路 Member since 2013 路 46 posts 路 33 votes
    10y

    @Jessica S. Thnks Jessica!  I was considering that strategy. Although I wanted to close fast so I could get the funds needed for this next project, it's not worth giving away that much cash. I was shocked when I got the final numbers.

    0Reply
  • Scott Radetich
    Investor 路 Portland, OR 路 Member since 2016 路 47 posts 路 36 votes
    10y

    I went through this a few months ago on one of my rentals.  I shopped around a lot looking for the best deal.  I ended up using an online company, Consumer Direct.  My closing costs were in the 2-3k range and the rate was 4.125.  Rates are lower now...  They can close in less than 45 days.  Oh, but Consumer Direct will only lend to you if you have 4 or less properties (or its a primary residence).

    0Reply
  • Isaac Frost
    OP
    General Contractor & Investor 路 Portland, OR 路 Member since 2013 路 46 posts 路 33 votes
    10y

    @Scott Radetich, Thanks.  We have 2 rentals so this may work for us.  I'll check it out.

    0Reply
  • Corby GoadeBusiness Member
    Investor 路 Boise, ID 路 Member since 2014 路 3k+ posts 路 3k+ votes
    10y

    @Scott Radetich, I closed a loan with Consumer Direct last year and have more than 4. That said, experience was decent, I've had WAY worse experiences with online banks. I'd try them again. 

    0Reply
  • Scott Radetich
    Investor 路 Portland, OR 路 Member since 2016 路 47 posts 路 36 votes
    10y

    @Corby Goade  interesting.. Was it a cashout on an investment or a type of loan on your primary residence?  My loan rep told me they can always to a primary residence.  But they can't do investment loans >4.  Maybe he misspoke or I misunderstood.

    0Reply
  • Corby GoadeBusiness Member
    Investor 路 Boise, ID 路 Member since 2014 路 3k+ posts 路 3k+ votes
    10y

    Hi @Scott Radetich, it was a refi on my primary, so that could be true. However, I did talk to the same rep there yesterday about cashing out a rental that I own free and clear and he gave me a quote. I haven't applied for the loan yet, so maybe they'd shut me down. 

    0Reply
  • Isaac Frost
    OP
    General Contractor & Investor 路 Portland, OR 路 Member since 2013 路 46 posts 路 33 votes
    10y

    @Scott Radetich@Corby Goade

    Thanks for the info on Consumer Direct.  Been talking to them yesterday and today.  The fees and rates are significantly better than what I was getting.  Love this community.

    1Reply
  • Robert Blanke
    Banker 路 Schaumburg, IL 路 Member since 2016 路 1 post 路 1 vote
    10y

    Yes, 15k in cost at that rate is crazy. Cash out, investment, FICO score and LTV will always factor the rate. Isaac if you would like please PM me and I can offer more information

    1Reply
  • Lee S.
    Northern, CA 路 Member since 2014 路 674 posts 路 444 votes
    10y

    I'm looking for a cash out loan on a new purchase/rehab that will allow me to get around seasoning issues.  I've owned house for 3 months, will be done with rehab in about a month.  Any suggestions?  I will contact consumer direct and see what they say also.

    0Reply
  • Stephanie MedellinBusiness Member
    Mortgage Broker 路 CA 路 Member since 2014 路 1k+ posts 路 642 votes
    10y

    As someone mentioned above, rates are higher for cash out refinances and non owner occupied properties, but that rate sounds high if it's a single family home (should be closer to 3.875%).  If it's 2-4 units, it's right about where it should be, but you shouldn't need to pay points at that rate.  

    To be fair, I'm looking at rates today, and they could have locked your rate a week or two ago.  Pricing has dropped a bit since the Brexit news.

    I'm not familiar with the process in Oregon, but unless there's some kind of mortgage tax or other fees specific to the area, for 15K in closing costs, I would guess you are either paying points or are funding an escrow account for property taxes and insurance.

    Did you get a loan estimate with your initial loan disclosures?  Or when your rate was locked? 

    [email protected]
    Stephanie Medellin, Loan Factory58 Reviews
    WebsiteView Page
    1Reply
  • Isaac Frost
    OP
    General Contractor & Investor 路 Portland, OR 路 Member since 2013 路 46 posts 路 33 votes
    10y

    We locked in in May with the last lender. We ended up going with Vertex at 3.75. Paying 5k in lender fees and title in order to get a better rate. Escrow is adding about 2800. So we're at about half the cost of Umpqua bank with a lower rate and P&I savings of over $100 dollars a month. @Jessica S. Thanks!! I totally took your advice and pulled 4 other loan estimates. Umpqua wouldn't match so I bailed. Lost $700 in appraisal but saving 5k and $1300 a year in interest. You guys should come check out the 480 SF turd box we bought in Cully 馃榾

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free