Good Refi Rate Or Not?
Hey gang, I am doing a 95% non-seasoning cash out refi.
I want to show the numbers and see if the rate is competitive or not.
Hard Money Payoff: $170,000
True ARV: $230,000
3 year ARM interest only, owner occupied rate: 6.5%
Rate seems high to me.... what do you guys think?
Credit score is 800+.
Thanks in advance.
If this is an investment property, which we'll assume it is since this is an investing website, then it is an excellent rate, especially for a 95% LTV.
But that's where I'd be concerned, the 95% LTV. Are you really planning on borrowing 95% of the value of the property? If so, I believe that would be a very bad idea. If this is going to be a rental, I find it hard to believe that it is going to cashflow at the LTV. More important, it puts you in a very dangerous position. If you have a hiccup in your REI plan, with no equity, you'll fast become the "motivated" seller that we investors like to have call us. I don't believe that is where you want to be.
Roger
Roger, I would prefer to sell it, if I have to, using seller assisted finance, perhaps taking back the second if the buyer has challenged credit. I agree with your scenerio regarding the cash flow on the rental. Don't really want to rent it, perhaps L/O as worst case scenerio. The home is in pretty hot area that is getting asking price for most and getting contracts pretty quickly.
Suntzu18
Well then, my question still stands. In fact it is even more important. If you are trying to sell the property, then why would you want to do a 95% cashout refi? This would put you in a very tough spot as a seller. Figuring in the agent fee of 5% (and you need to figure this whether you're using an agent or not because if you're not, the seller will expect you to discount it), you've now got no room for negotation. Unless your area is an extremely hot market where you plan on getting 3-5% more than your asking price within a month or less, I would want a little leeway on my market price. Just because you think it's worth X amount, doesn't mean everyone will. And if it is that kind of hot market, why would you want to spend the extra money on closing costs to do a cashout refi?
Roger
rajwarrior...hats off to you. Many will learn from your wisdom. Keep up the good posts.
[addsig]
great rate on a 95% cash out refi. did you have to verfiy income (paystubs or w-2's). please give me the lender you are using. And you have an interest only.. nice deal..i
Hey JC,
We do a 95% Cash Out under similar programs & Rates. Ps. drop me an email if you're looking.
[addsig]
This is a no-doc refi. We have decided to drop the cash back amount down a bit to 85%. Searched around, these rates are about as good as they get. Again, 814 credit score.
Thanks for the responses.
Suntzu18