looking for a lender to do a cash out refi under 50K

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looking for a lender to do a cash out refi under 50K

Mike S.
Investor · Colonial Heights, VA · Member since 2014 · 115 posts · 68 votes

I have a property I own free and clear and want to do a cash out refi for around 40k. Should appraise for around 60k I am past the 6 month seasoning period. I have found a local lender that can do it but the closing costs are way too high. If anyone can help me out on here I would appriciate it. 800+ fico.

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Chris V.
Rental Property Investor · SF Bay Area · Member since 2015 · 154 posts · 179 votes
10y

I ran into a kind of the same thing a while ago. The fixed portion of the cost of doing a cash-out is just too high to make a REFI worthwhile for the lower amounts. So; have you considered a HELOC? That is what I ended up doing. 0 up front costs and 0 costs as long as you don't use the money. 10 years of interest only followed by 20 years of having to repay on principal. Only disadvantage is that the rate is not fixed, but IMO as a short(er) term solution it beats the hell out of a cash our REFI with a +-$3000 fixed cost at the loan amount you are talking about... Just sayin':)

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  • Chris V.
    Rental Property Investor · SF Bay Area · Member since 2015 · 154 posts · 179 votes
    10y

    I ran into a kind of the same thing a while ago. The fixed portion of the cost of doing a cash-out is just too high to make a REFI worthwhile for the lower amounts. So; have you considered a HELOC? That is what I ended up doing. 0 up front costs and 0 costs as long as you don't use the money. 10 years of interest only followed by 20 years of having to repay on principal. Only disadvantage is that the rate is not fixed, but IMO as a short(er) term solution it beats the hell out of a cash our REFI with a +-$3000 fixed cost at the loan amount you are talking about... Just sayin':)

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  • Eric Hrlbock
    Rental Property Investor · Poughkeepsie, NY · Member since 2013 · 262 posts · 96 votes
    10y

    I am doing a condo cash out refi through td. Interest rate is 4.5 and and I'm taking out 52000. No other bank would do it. Give them a call they have been real easy to work with.  

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  • Darrell Shepherd
    Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
    10y

    Try looking at a local credit union or small community bank. The HMLs that will do those small loans will kill you with minimum origination fees. You should be able to get a HELOC or secured personal loan with that score and any decent income. That's a pretty small amount, you can go private too. Lots of people have $40k sitting around with the stock market so volatile. I just borrowed $60k for a boat at 6% because my guy was trying to get some money out of stocks and I wanted to be able to pay the loan back in chunks as I sold houses instead of monthly since I don't have monthly income. I pay him WAY more on the flips we do. With that kind of credit score something like Prosper.com would work well I think, but I've never used them.

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  • Mike S.
    OP
    Investor · Colonial Heights, VA · Member since 2014 · 115 posts · 68 votes
    10y

    Thank you for all the great advice. I can understand all the legit costs but a 905 origination fee and a 750 commitment fee is a bit much, and this is based on a 26k loan from a local community bank. I may try the LOC route.

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  • Mike S.
    OP
    Investor · Colonial Heights, VA · Member since 2014 · 115 posts · 68 votes
    10y

    Thank you for all the great advice. I can understand all the legit costs but a 905 origination fee and a 750 commitment fee is a bit much, and this is based on a 26k loan from a local community bank. I may try the LOC route.

    0Reply
  • Mike S.
    OP
    Investor · Colonial Heights, VA · Member since 2014 · 115 posts · 68 votes
    10y
    0Reply
  • Derek Carroll
    Syndicator and Fund Manager · Victor, NY · Member since 2012 · 760 posts · 345 votes
    10y
    Mike Shay reason being on the fees is that it takes the same amount of time and work to lend on a $25k loan as it does on a $100k loan. Most only have so much capacity so they have to say no to the smaller less profitable loans. Those who will say yes need the fees as incentive. Keep shopping the local credit unions and community banks.
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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    10y
    Those fees are not out of line. Like others notes to do a $250k mortgage or $25k it's the same amount of paperwork and research etc.
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  • Jassem A.
    Investor · PA · Member since 2013 · 1k+ posts · 602 votes
    10y

    home equity loan or home equity line of credit usually have no closing costs but typically easier to get on your primary or will have lower rate on your primary

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  • Jeff Rabinowitz
    Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
    10y

    I was told by a lender that in Michigan a lender cannot deny a borrower based on the size of the loan. (I am not positive this is accurate or is still accurate.) They charge the same closing fees for every loan. Of course, as a percentage of the loan those fees are much higher for small loans and most small borrowers will not go through with the transaction. I once bought a $10K note from a local lender and was surprised at the amount of the fees the borrower paid. The lender told me since the borrower qualified and paid the fees they made the loan. 

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