Cash Out Refi...how does it work?

[Bob Houston]

I would like to do a cash out refi on one of my rentals so as to buy another property...once I initiate the refi, do I have to start paying back immediately, or can I set it up and " pull the trigger" once I find the property I want to buy? How long does it typically take to complete a cash out refi?

[Mike McCarthy]

@Bob Houston usually a conventional refi can be done in 30-45 days. Nowadays, that’s probably 45-60.

Once you close on the loan, you get the money and start paying it back - though as with all mortgages, you don’t have to pay until month 2. You can drag out the closing a bit, but every document you provide ‘expires’ after a month or two, so the underwriter need to re-review the application with new docs you provide.

Long story short, but recommendation is to get the refi done with a locked in rate, get the cash in your pocket, and be ready for the next great deal. Finding a good deal then having to deal with the refi will be annoying to say the least.