First Attempt to Refinance My First Rental Property: Advice?

[Rik Hunter]

I have a duplex that I originally purchased with a VA loan, and I moved out of my unit to finish rehab and moved into a SFH live-in-and-BRRRR. Like pretty much everything, its value has gone up, and based on comparables, I'm estimating its value at up to$275k in Chattanooga. My current lender has said I'd need to get a commercial loan (I've started to look for other lenders).

First, is this commercial loan correct? If not, what type of loan would I be looking for? The numbers, as I see them:

At a $275,000 value, I used a 75% LTV, so $206,250, and I would hope to find a lender willing to see the remaining 25% as my equity. I currently owe $149,000, so a cash-out of $57,250.

I currently pay $977/mth: $645.05 for principal and ESCROW is $331.57 (taxes and insurance/no PMI).

Using the Bankrate calculator, a new loan at $275k and 3.1% would be $1,165/mth (approximates, of course):

• $918 principal and interest
• $66 Insurance
• $181 property tax

Anything that I'm missing or should be considering here? 

[Reid Chauvin]

You should be able to get a cash-out refinance on this loan, but if you do not live in the property then it will be considered an investment property. Max LTV for multi-unit investment property is 70%. Also, your interest rate on a multi-unit investment property is more likely to be closer to 4% than 3% right now. Your lender should be able to run an estimate for you pretty easily to help you decide if a cash-out refi truly makes sense.