Rehab/Refi question

[Matthew Mucker]

I'd like to buy a mutifamily (4plex) REO that needs work using hard money.

My question is, when I go to refinance, if LTV is below 80%, am I likely to be able to find a zero-down loan?

I emailed one mortgage broker who said no, I wouldn't be able to. I'd like to know more before I get into a situation that may require me to lay out more cash than I'd planned. I don't want to refi and have to put 10-20% down.

The property is in Ft. Worth, TX.

[Christian Malesic]

Originally posted by "NogginBoink":

My question is, when I go to refinance, if LTV is below 80%, am I likely to be able to find a zero-down loan?

I think you mean, if LTV is ABOVE 80%, correct? Loan to Value (LTV) refers to the bank's portion of the loan, meaning the remaining portion is your responsibility. This may be by cash down, creative financing with a previous owner holding a note, or equity in the property due to a good buy. Remember the definition to help you use it to your favor. It is LTV of what to what? Obviously, the loan portion of the equation is a dollar amount you borrow. The value is an appraisal that you have some control over via the rehab you plan on doing. Theoretically, the rehab will increase the value. This all assumes you buy correctly. The value is the value based on comparable properties in the area.

The better work you do up front (purchase price, manage rehab costs, rehab the biggest bang for buck areas, etc.), the more likely you can put "zero-down" on the refi loan. Some banks want 75%, others 80%, but this is the most common range.

The lower your LTV the less likely you will need any cash.