Take Cash Out with a Refinance

With home prices rising in value in cities regarded as expensive like San Francisco, Los, Angeles, Seattle, New York, South Florida, and Boston, many homebuyers who qualify prefer not to put 20-percent down. In addition, existing homeowners who purchased a few years ago have realized increases in equity and may want to cash-out some of the gains. In San Francisco, the median home price has surpassed one-million dollars so being savvy when it comes to your financing options have never been so important.

A couple of solutions for homeowners and buyers alike is a 10-percent down mortgage or 90% LTV financing. Two attractive options exist for borrowers. The first is an 80/10/10 loan where a buyer needs to come in with a 10-percent down payment on a purchase transaction up to $1M.

Here's an example:

Purchase Price: $1,000,000
Loan amount:   $800,000   - 80% 1st loan on a 30-year fixed rate -
Second loan:     $100,000 -   - 10% 2nd loan either fixed rate or line of credit
Down payment: $100,000 -   from borrower
End Result: 90% CLTV financing

The second method is also 90% financing but is structured as follows:

Purchase Price: $1,000,000 (UPDATE Sept. 2019: now 90% to $2.5 Million)
Loan amount:   $900,000   - Just one loan with NO Mortgage Insurance
Down payment: $100,000 -   from borrower
End Result: 90% LTV financing
What's Needed?: 12 months liquid reserves and a 680+ credit score

We also offer 90% one loan up to $875,500 w/o MI and VA loans in high cost counties that usually come out to be less than 10-percent down when dealing with properties one-million dollars and below.

Keeping more assets available has its advantages

  • The first advantage is when you have an investment portfolio, it can remain untouched and keep earning dividends/returns or gaining in value.

  • You may actually qualify for another real estate property that is available

  • By doing a cash out refinance, you take out some built up equity, your mortgage interest tax write-off may go up, and you don't liquidate any stock market investments.

There are more refinance loans over $1.5 million that only require 10% equity in the borrower's home.

90 LTV cash out highlights:

90% financing up to $2.5 million with full documentation which means two years verification of employment, income, and liquid assets.