I have been thinking about refinancing one of my rental properties to get some cash out for another purpose. When I spoke with CitiMortgage (the mortgage holder), I was told that they will only do a 50% LTV on a cash out refi in Texas. I was wondering if others had run into similar problems or if the problem was just with CitiMortgage.
Some Specifics:
Current value 100K (purchased 5 years ago)
Loan Value 49K
Current Interest rate 6.75 amortized over 30 years
My FICO 780 to 800
Theoretically you can go up to 90% on a full doc NOO cash-out in Texas. Stated may be capped at 75-80% depending on the lender. There are several factors tht go into the equation besides credit score though. Things such as doc type, assets, DTI all go towards the UW decision. Hope this helps.
Capped at 75-80% should not be a problem, but 50% is a problem. I was just wondering which lenders will do a cash out refi. Citimortgage said that all they would do was 50% before we even got as far as talking about documents or assets or even property value. All that I had told them was that I wanted to do a cash out refi on a rental property in Texas.
if all you want is a heloc then any local state bank should be able to help you. If you are looking to refinance the entire note then try Wachovia or Countrywide retail. Where in Texas is the house?
The house is about 50 miles north of Dallas. I had not really considered a HELOC because the rates are typically higher, but that is a possibility. If I understand correctly, the fees associated with a HELOC are less than a refi. I will talk to Wachovia and Countrywide to find out what my options are. Thanks for the info.
Here is what he means by 50%. A lot of the phone reps don’t understand Texas law. They have told me the total LTV cannot exceed 50% before on a cash out also. Not true.
In accordance with state law, the maximum loan to value ratio may not exceed 50% of the fair market value of your homestead property and the combined loan to value ratio may not exceed 80% of the fair market value of your homestead property. For non-homestead properties, the combined loan to value ratio may not exceed 100% of the fair market value of the property. The loan amount you may receive will satisfy the state maximum loan to value limitations, but may be limited further based upon the value of your collateral and your creditworthiness.
So this means that the amount that I can borrow against a homestead property is 50% of fair market value or 80% of the combined value of both my homestead and rental property? Does this mean that I could not do a cash out refi on my personal residence if I owed 55% of the current market value? If I owed 90% on my 300K personal residence, could I not do a cash out refi on my rental property that I only owed 50% on? I’m more confused than when I started.
As I said before, I do not believe that my other credit worthiness had anything to do with the answer I received.