How much additional debt can u add to traditional mortgage?

[Tom Nellman]

Hi,

I am interested in purchasing a rental property with a 30 yr mortgage.  The rental property is $85,000.  I also carry a personal loan of $277,000 that is on a 5 year note, has 3 1/2 yrs left.  I have never missed a payment  on any loan and already paid that extra debt down significantly.  Are there any lenders that would allow this to be put on the mortgage, so that I could extend these other notes out 30 years at cheaper interest?  Thanks!

[Andrew Postell]

@Tom Nellman what you are asking about is called a "cash out" loan.  So "cash out" loans are possible but you will be required to keep a certain percentage of the property value in equity.  For example, in Texas, we are required to keep 20% as equity.  So if your primary home was worth $100k, and you had a $90k mortgage....then you are already over the 80% "Loan to Value" threshold....meaning, you only have 10% equity when you are required to have 20%.  Other states don't require 20% as we do on your primary home.  Maybe try posting in the state specific forum here on Bigger Pockets so you can get some good local people to recommend their lenders, etc.  Reference what you think your property is worth as well as the above information and that will help get the right information.  Hope this helps!