can I get the home equity out of my rental property (no mortgage)?
April 8th, 2011 | by admin |I purchased a rental property back to 2008, which was the cash deal (fore closure), and one question is, can I get the home equity out of this rental property, since it has no mortgage, has no lien on it, and the downside of the house value is limited, it seems that it is no way to find the information of which bank are willing to approve this kind of home equity loan?
If no bank approve this kind of loan, what is the best strategy to get the cash out of this investment property, any idea or information?
Thanks.
Not all lenders are providing cash out loans on rentals properties, but these can still be found. It would probably be easier to get a fixed loan amount than a revolving line against the property. The amount of cash that you may be able to get out will probably be capped, and besides loan-to-value ratio, the amount available will also be limited by the debt service capacity of the property (i.e., net operating income) and your overall personal debt service capacity (i.e., your aggregate debt to income ratio).
Even if no bank in your area will lend on the property, you can always find a private lender, but that would generally be at a much higher interest rate. Hope that helps.
2 Responses to “can I get the home equity out of my rental property (no mortgage)?”
By Radioactive on Apr 8, 2011 | Reply
You can’t get equity out of a home that has no mortgage.
You will have to finance the home.
That means closing costs all over again.
Title searches, lawyer, bank fees, etc.
References :
By Marko on Apr 8, 2011 | Reply
Not all lenders are providing cash out loans on rentals properties, but these can still be found. It would probably be easier to get a fixed loan amount than a revolving line against the property. The amount of cash that you may be able to get out will probably be capped, and besides loan-to-value ratio, the amount available will also be limited by the debt service capacity of the property (i.e., net operating income) and your overall personal debt service capacity (i.e., your aggregate debt to income ratio).
Even if no bank in your area will lend on the property, you can always find a private lender, but that would generally be at a much higher interest rate. Hope that helps.
References :
I’m a banker.