Interest on Cash Out Refi vs Investment Property Purchase

[Jack Liu]

Hello all. I am a new investor that just closed on my second property in the Indianapolis area. Just wondering if anyone knows if interest rate/terms for a cash-out refi is worse than a regular investment property purchase. My guess is that the banks would perceive cash-out refi as slightly riskier.

Thank you for your help!

[Chris Mason]

MASSIVELY riskier, not slightly. Half these people calling me for a cash out refi are hedging against job loss, and/or an engineered job loss wherein the unemployment (with the $600/wk kicker) is higher than what they currently make working. The banks aren't stupid (well, except when they are, of course).

Cash out refis are starting to open up, and they aren't as crazy as a month ago. If COVID-19 has a COVID-20 second wave, expect them to dry up again.