LoveToKnow Mortgage:AllComments

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Jordan, you're right that costs will be higher since the home you want to refinance is a rental. In fact, most lenders have much more stringent loan-to-value ratio for cash-out refinances on investment properties. If it were me in the same situation with being overseas and returning in a year I would simply concentrate on saving money, although some people might advise you to buy now since it's really a buyer's market in most areas of the country.

For me, though, it comes down to this: I wouldn't want to borrow money on a condo rental that can stop being profitable in a heartbeat if the renters decide to break the lease and leave...especially if I'm overseas and can't run my investment homes firsthand.

Ultimately the choice is yours, and I wish you luck and hope you enjoy your time overseas.

-- Contributed by: Tamsen Butler

I'm just now learning about cash out refinancing. I am thinking about doing it b/c I want to use the money to buy a second condo (first condo is a rental and doing well). I am currently overseas with housing included and will be returning home (VA/DC) in a yr. Is this a bad idea or should I just continue to save money and wait a while? I suppose the costs are quite high. Thanks, Jordan

-- Contributed by: Jordan

Josh, thanks for the comment. Although I never advise this, unfortunately a few mortgage lenders do allow borrowers to take out more money than their home is worth on a refinance. It's almost never a good idea to get yourself into a situation where you owe more than your home is actually worth, but there is a market for these types of loans so some lenders do offer them. With the recent mortgage crisis these types of loans are getting harder to find, but they do exist.

-- Contributed by: Tamsen Butler

Cash out refinancing allows you to refinance your home for more than it is worth and pocket the extra cash at closing.

This sentence is factually wrong

-- Contributed by: josh

Veronica, if you have any friends who work within the mortgage industry you may want to have them take a look at the offer. If the offer is from a different financial institution than the one you usually bank through you may want to see if a mortgage consultant at your personal bank is willing to take a look at the terms of the loan. Just remember that any loan that seems to good to be true probably is.

-- Contributed by: Tamsen Butler

I understand what I have just read about cash-out. I feel like I have found a good option with a company,but I would feel better if someone else could review my offer. Any suggestions?

-- Contributed by: Veronica Hunter
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