I didn’t think about being able to refinance on a residential consumer loan. If I can refi on a standard loan like this and free up my 20% down without waiting 6-12 months (because of 80% LTV), then I’d rather do this from the get go. I can purchase the property with 20% down, and right after repairs refi based on appraised value to get my initial 20% down payment investment, correct? When I go to refi, that’s when I would want the lowest interest rate for 30 yr fixed.
You were right on the commercial loan, it was variable rate with points.
When you refinance, you either refinance the current balance of your existing loan, or, you refinance into a larger loan to take “cash out” of your equity. In both cases, the actual amount of the loan you will get from the refinance can not exceed 75% or 80% of the appraised value of the property.
Just refinancing the current balance of your existing loan without increasing the loan amount is called a “rate and term” refinance. A rate and term refinance often can be done with only one day of title seasoning.
If you want to get your downpayment money back, you need to do a “cash out” refinance. The maximum amount you will be allowed to borrow is 75% or 80% of the appraised value of the property. Lenders, as a general rule, are not allowing a cash out refinance until you have owned the property at least six months, and some require a full year on title.