Are these good terms to cash out refinance of the property?

I have a lender who is willing to let me cash out the property for one million with 10 years fixed term at 6.8%. The total fees they charge is 3%. I haven't found the investment property yet. Lender wants me make a decision within 3 days. Are these good terms at the present time?
In Buying Property - Asked by ling C. - Jan 16, 2009
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Answer(s)

Joe V.
Owner/Investor
Plymouth, MI

Kind of. You can do better. You can actually get into a non debt piece type of financing for this amount. The idea that the lender has put such a short time line on you tells me they want you to make a quick decision before you have a chance to do any due diligence on it...such as find out if you can find better. Another options would be to acquire a Business Line of Credit that would cover the full amount and leave you with out any lien to the property. one big reason for this it it would also give you time to shop for a refinance to take out the LOC. This would be easier to do since at that time the property would be free and clear, since the LOC would not be directly connected to the property. The $1M amount would not be a problem either. You can get a NON-Signatory, Business LOC for well over that amount in around 60 days or less.

Jan 17, 2009
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ling C.
Owner/Investor
West Columbia, SC

Thank you Joe for answere my question. What is non-signatory, business LOC? Where do you get Business LOC? From bank or private lender? Usually what is the term?

Jan 18, 2009
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Andres G.
Owner/Investor
Miami Beach, FL

In to provide an accurate answer to this question I would need more information. "Good Terms" are relative to the qualifications of the property and the borrower. If you have bad credit or if the property is not stabilized or if their is a glaring issue with the qualifications then this may be a GREAT deal. If the property has been stable for 3 years, your credit is over 720 you have income assets and a high DCSR it may be worth your time to shop it a bit. Small to Midsized regional banks and credit unions are an excellent to find funding. If you have only received one quote then I strongly suggest you shop a bit, DO NOT allow multiple lenders to pull your credit report. Put together a package with all the information a lender is going to require and send it to 5 lenders then make a decision.
Andres Garcia
305-496-1776

Jan 22, 2009
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Chris S.
Broker/Agent
Coeur D'alene, ID

Totally shocked to hear a lender offer to cash you out. If you can find a place to use the capital, and earn a return greater that 6.8% the simple answer is YES>

Feb 6, 2009
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