“Refinancing Investment Properties”
So based on our conversation, I'll need to keep it for 6mo. If it appraises for 150K, then is the maximum mortgage I can take out 105K (70%) or is the maximum cash I can take out 105K? I just want to make sure I'm clear on my numbers. I wanted to take out a mortgage for around 135K, but I don't know if I can just pick and choose the value I want, as long as it's under the appraised amount?
Unfortunately, many are a bit unrealistic when it comes to refinancing investment properties. In Amanda’s situation if her property will in fact be worth $150,000 after renovations and 6 months of ownership, the loan amount would be $105,000, not the $135,000 that she wants.
I explained to her that the property would have to appraise over $190,000. She told me that her research showed that value would be closer to $150,000, but she is willing to have the property appraised to make sure.
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