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Reserves for Investment Property Cash-Out Refinance

How much reserves are required for a cash-out refinance on an investment property and can I use the cash I am taking out for the reserve requirement?

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

For a cash-out refinance on a non-owner occupied property you are typically required to show proof of reserves (usually three-to-six months of total monthly housing expense) at the time you apply for the loan. Additionally, according to lender guidelines the proceeds from a cash-out refinance are not an acceptable source of reserves.

We always recommend that you contact multiple lenders to understand how they would handle your unique situation. You can compare non-owner occupied lenders in your area by clicking INTEREST RATES We advise you to contact at least four lenders as lender qualification requirements can vary. Additionally, the interest rate for a cash-out, non-owner occupied mortgage tends to be higher than the interest rate for a regular mortgage which makes comparing lenders even more important.

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About the author

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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