I have a quick question for the board regarding refinancing a rehab that I recently completed. I financed the rehab through a combination of a home equity loan on my current residence, savings, and no-interest credit cards. The total purchase price plus rehab expenses were $64,000, and the home is now valued at roughly $80,000. I intend to hold the home as a long-term rental and would now like to refinance the property for $64,000 to pay off the home equity loan and credit cards. I went to the small town local banker where the property is located and the best they can do is a commercial loan of 15 years @ 7.95%. This means a monthly P&I of $614 plus taxes and insurance. It will rent for roughly $750 which is enough to cover the loan, but I was hoping for some cash flow on the property through a 30 year note.They don’t offer any loans on this type of deal above 15 years. Is this normal or should I contact other lenders in an attempt to get a 30 year note? I’m located in central Texas if that makes any difference.
Yes, you should absolutely contact someone else. Preferrably a mortgage consultant that specializes in investment loans.
As far as terms go, no one on this board should be quoting rates as this could be very confusing without knowing more specific details. There are lenders that will have 30 year loans.
Items that any broker should be discussing with you include:
seasoning
employment
income
assets
of properties owned
One thing to remember, the cost you have at a bank will usually be much lower than any broker will show you.
Available for additional assistance if you would like.
Bank of America is offering no season refi’s now and I think you can do them on investment properties at 80%. check with them… I notice from going to my bank, they are becoming very aggressive now and want to write loans.
My friend just did a HELOC with them and it took 2days. he did not even have an account there, he orginally went to the 2 banks he banks with for over 10yrs and both wanted so much info, it was crazy…they made it easy…
Commercial loans are as diverse in amortization (15 yr/20 yr/25 yr/30 yr FXD; 6 mo/1 yr/2 yr/3 yr/5 yr/7 yr/10 yr ARM) and repayment (principal and interest, interest only and deferred interest) as their residential counterparts.
As another poster has alluded, more information would be needed to steer you in the right direction.
Regards,