No-Seasoning Cashout-refi .... Confused

[Michael Dunn]

There is something that I am confused about , and that is the following ......  " The New Loan amount must NOT be more than the borrower's initial investment in purchasing the home + you can finance the Closing Costs . Initial Investment is defined as the Sales Price, NOT the Sales Price + the Cost of Improvements done to the property "

So from the above statement, this seems to mean that the New " Cash Out " loan can NOT equal more than the Initial Purchase price for the property + the Closing Costs ?

Also, if the Property is an Owner Occupied , what is the max LTV that I can expect ..... 85% ? 100% ?

What I am not understanding is ..... How do you get Actual Cash out of your property, if they will only Loan/base the amount of the Cash-Out refi on the Purchase Price , nd Not on what the properties ARV is ?

Example .... If you purchase a property for $60,000 ( includes Closing Costs ) ,

and they will do a LTV for the Cash-Out of 85% , this would be $51,000

So where does the Cash you can get come from ? You are in the " Negative " by $9,000

If the 85% LTV was based on the ARV ( say $80,000 ARV ) , then I can see where there is Instant $ to get from the house , as a Cash-Out ..... $8,000

Just a bit confused as to how this process works. Thank you for the help

[Upen Patel]

@Michael Dunn Where you are getting confused is with regards to seasoning. With no-seasoning you can ONLY do a rate-term refi. To do a cash-out refi, you have to season for 6 months. After that a new appraisal can be ordered and the loan be based on the appraised value.

Upen Patel, Mortgage Banker
Federal NMLS# 1374243