What LTV % Needed For Cash-Out?

[Devin McGinley]

I owe 274k on my property getting appraised in the next couple weeks, sometime. The exact same floorplan just sold for 360k down the street. I'm thinking around 350k is what mine will appraise for. With that being about 78% LTV; would that warrant a cash-out?

Knowing would help me prepare and plan for my next property.

Thanks!

[Timothy Hero]

Value: $350k

Debt: $274k

Loan size based on 75% LTV: $262.5k

Closing cost: $6,500 (2.5% of the loan amount)

Escrow: 12 months (depending on the lender)

Cashing out is not an option. In fact, expect to bring $18k to the closing table.

There's lenders that'll do 80% LTV, but you'll still need to bring like $5k to the table.

[Ross Y.]

I'd recommend using a HELOC or 2nd position loan over a cash out refi. By doing a cash out refi, you're resetting the 1st position interest rate (probably higher) and adding PMI with high closing costs.

I recently did a 95% LTV HELOC… that might work for you. The interest was high (8.5). But I'm using it as a temporary line to acquire new and upgrade my existing portfolio. My plan is to secure permanent financing on each asset improved or purchased to replenish the HELOC.

Good luck. 

. 

[Scott E.]

Cash out refi is not going to happen due to your loan to value.

HELOC is another story, and in my opinion a better option for investment properties for its ability to fund you when you need the funds, but it can be repaid to lower your debt ratio when you don't need the funds.

[Liam Delumpa]

Quote from @Timothy Hero:

Value: $350k

Debt: $274k

Loan size based on 75% LTV: $262.5k

Closing cost: $6,500 (2.5% of the loan amount)

Escrow: 12 months (depending on the lender)

Cashing out is not an option. In fact, expect to bring $18k to the closing table.

There's lenders that'll do 80% LTV, but you'll still need to bring like $5k to the table.

 Curious, where did you get the 18k from?

[Adah N.]

@Ross Y.

Who did you use for the 96% LTV HELOC?

Thanks