Used for a variety of investment property types, including, Single-family, Condos, Townhomes, Multi-Family, Commercial, Mixed Use, Office, Retail, Industrial, and Warehouses
As opposed to selling and being hit with capital gains taxed. You can cash-out and deduct the interest on your original loan balance no matter how much equity you access from your home.
Cash-out refinance works well for those who have held a property for a long time, building up significant equity they would like to utilize for other purposes. At least 30% equity is a good rule of thumb, though you can pull out equity when you have 20%.
Cash-out refinancing lets you tap the equity in your home and use it for any purpose you like. And it’s a great way to access a large sum of money at lower interest rates.
Alex owns a duplex in Nashville, TN, originally purchased for $250,000. Over time, the property has appreciated to $400,000, and Alex wants to access his equity for future investments. He secures a cash-out refinance loan from Summit Capital Lending with a 75% loan-to-value (LTV), allowing him to refinance into a $300,000 loan while keeping a competitive 7.15% fixed interest rate. After paying off the remaining mortgage balance, Alex pulls out $100,000 in cash to fund renovations on another rental property. This refinance strategy helps him leverage equity while maintaining strong cash flow.
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