Cash-out refinance interest rates too high!

[James Denon]

I need some help.

I am getting ready to cash out refinance a property I bought all cash back in June 2017 in Springfield, Massachusetts.

I got couple of quotes. All of them are in the low 5 to mid 5's with couple of thousand closing costs @75% LTV which is pretty high in my book!

I have perfect credit and no debt.

I am surprised that non-owner occupant, 3 family is penalized so much over an owner occupant.

If anything, I am more capable of paying the mortgages better than an owner occupant because the property produces more than 3.5 times the mortgage payment. It is professionally managed.

Does anyone know credit unions or banks that are more investor friendly and who can make logical risk assessments? Preferably 80-85% LTV with low 4's interest.

I am kicking myself. Monson Savings Bank was willing to do 4.1% with 70%LTV back in July. I shoud have done that. Instead, I waited for the seasoning period to be over and to get a better %LTV with Fannie and Freddie type loans.

I know it sounds stingy to sweat over 1% interest rate but that makes ~$100 monthly difference in cash flow. For a managed property, you are working with thin margins. So, $100 makes a difference in long term cash flow.

[Chris Mason]

Originally posted by @James Denon:

I need some help.

I am getting ready to cash out refinance a property I bought all cash back in June 2017 in Springfield, Massachusetts.

I got couple of quotes. All of them are in the low 5 to mid 5's with couple of thousand closing costs @75% LTV which is pretty high in my book!

I have perfect credit and no debt.

I am surprised that non-owner occupant, 3 family is penalized so much over an owner occupant.

If anything, I am more capable of paying the mortgages better than an owner occupant because the property produces more than 3.5 times the mortgage payment. It is professionally managed.

Does anyone know credit unions or banks that are more investor friendly and who can make logical risk assessments? Preferably 80-85% LTV with low 4's interest.

I am kicking myself. Monson Savings Bank was willing to do 4.1% with 70%LTV back in July. I shoud have done that. Instead, I waited for the seasoning period to be over and to get a better %LTV with Fannie and Freddie type loans.

I know it sounds stingy to sweat over 1% interest rate but that makes ~$100 monthly difference in cash flow. For a managed property, you are working with thin margins. So, $100 makes a difference in long term cash flow.

 Rates are trending upwards and will probably continue that way for a while, you and everyone is pissed, yup, that's where things are at, let's move on dot com. 

When you get a mortgage in a rising rate environment, there are three possibilities for the future: 

• Rates continue to go up. Good thing you locked in what you could, when you could!
• Rates flatten out. It's a wash. It is what it is.
• Rates drop. You refinance and harvest the improved cashflow!

No point in worrying about July 2017. There is no time travel allowed.