Refinance underwriting questions

[Allison Talus]

I'm starting my first refinance. It's actually on my primary home which I never expected to do, but the market has skyrocketed so much that even worst case scenario I can rent it more than my new monthly payment would be.  I have a 3.5% rate now, which I know is really low, but from conversations with lenders it sounds like I can get something pretty close.  Even best case scenario around 3.35%!!!  Which I know not to expect. Numbers still all make sense for the cash I can pull out to help by two more units/properties.  

Anyways, I'm curious during the underwriting process if it's negative to say I want to use the money to buy more properties?  Every lender I talk to asks if I'm refinancing to "pay off debt" or "for home improvements".  Neither of those are my situations.  Do they respond well to "other" or "using the cash to buy investment properties"?  

Also, when everyone talks about "local banks" are you mostly referring to credit unions or private lending?  I've talked to a few local (non-credit union) banks in Denver, and they all follow Fannie Mae/Freddie Mac loan requirements.  I understand they know their underwriters better than a Wells Fargo or Chase, but what's the real benefit? 

[Chris Lopez]

@Allison Talus - Be honest with the lenders on what you want to do with the money. They are asking to find out your motiviation. There is nothing wrong with pulling money out to buy more properties. I'm doing that myself! Make sure you talk with a lender who knows the investing game. Doing a cash out refi will most likely change your debt to income ratio, which could impact buying more properties.

Buy local banks people mean the First Banks, not the local BofA. Banks that operate within only CO have different lending options than national banks. For a refi, I'd recommend going the conventional route. The local banks and their portfolio lending come into play more for buying rental properties.

@Joe Massey is doing my refinance. He knows the game. Connect with him.