Refinancing a Free and Clear Property - - - What are my Options?

If I own a home free and clear and is it possible to refinance. I would like to get cash out of the equity of the home but I do not want to sell it. Can I do an equity line of credit or refinance?

The home is a tri-plex, rental property. Is this possible, and if so what would my terms potentially be for the loan? How many years, etc…

Thanks

There are lenders that offer a HELOC on rental property. The draw period is usually 10 years, after which any remaining balance is amortized over 20 years. This is the best way to finance property, in my opinion. Closing costs are minimal, and you only use the money you need to buy the next property. If you use the rents from the current and next property to pay the line, you will have it paid off quickly.

That sounds good to me. How simple is it to get a HELOC? Do I need to put any money down?

What kind of Loan to Value can I get on a HELOC? Could I get 80% of the value of the property or is it going to be much less?

Thanks!

I recently spoke with someone at Wells Fargo and they said they do 60% LTV on non owner occupied properties. I would also inquire at local credit unions.

Also, I discovered this thread on the fatwallet forum: http://www.fatwallet.com/forums/finance/150875/

I hope that linking to that forum is not a violation of the rules. They recommend a number of lenders for HELOCs.

Morty, please let me know the results of your inquires regarding HELOCs. I would like to know what banks and credit unions are investor friendly.

Thats really good information. Thanks for sharing. I plan to move forward with my investment and I will definately let you know where I found the best deal.

Great! Please do!

DO NOT use a HELOC. Do a cash out refi. Use a mortgage broker that primarily works with investors. Depending on how long you have owned the property free and clear, what name is has been under, and how many financed properties you have, you can get 75% LTV cash-out refi for an investment property at 4-4.5% (current rates for 30 year, fixed mortgages on investment properties).