Cash-Out Refinance 3 Family Investment Property Prov, RI

[Jose Escobar]

Hello Biggerpockets Community,

I had a question in regards to Cash-Out Refinance for a 3 family investment property here in Providence Rhode Island. I called a number of mortgage lenders and everyone is telling me that I can't go higher than a 70% LTV for a Cash Out Refinance anywhere. Is this true?

When I purchased the property I put 25% (Required for an investment property) a couple years back and now I want to recoup that down payment to purchase another investment property. Am I looking in the right places or is it just the reality of the market. Thanks again for your time.

[Andrew Postell]

@Jose Escobar the 70% Loan to Value rule is for a cash out conventional loan.  This is a conventional rule only, meaning that portfolio loans can do things differently.  Conventional loans are the loans with the lower rates, better terms, etc. but they are governed by Fannie Mae/Freddie Mac (if you recognize those names).  So any bank that offers a conventional loan can only go up to 70% on a cash out loan with a 2-4 unit property. 

A portfolio loan is governed differently because a portfolio loan comes from the bank itself - it is their portfolio loan product.  Meaning, that specific bank calls the shots on this loan.  And if you go to a different bank to find out about their portfolio loan it could be entirely different.  So when comparing portfolio products always ask for all the details, and not just interest rate.  Rate is important but so is the term (length), if the rate is adjustable, if it has a balloon payment, if it has a renewable period, if it has prepayment penalties, etc.  Portfolio loans could have some of those features or all of them.  Hope this helps!