New to Real Estate · El Dorado Hills, CA · Member since 2021 · 14 posts · 2 votes
I bought a home with cash. I did not have it appraised at the time of purchase. The house has appreciated even though it has not been 6 months and I'd like to get my cash back to purchase other properties.
First, do I have to wait for 6 months and why? Second, can I pull out the cash based on the newly appreciated value or do I have to use the original amount I paid? Third, are there loans available for 80% LTV in this situation. Calling all lenders...I'm looking to refinance this baby!:)
@Alisa K. The majority of lenders require a 6 months seasoning period.
Seasoning is designed to prevent the constant flow of homeowners looking to refinance, over, and over, and over. That situation would be extremely risky for a lender. The only way around that is doing Delayed Financing. It has pros and cons but in my opinion just wait the 6 months and get a better rate. Yes - you'll get a new appraisal with said lender. No - they won't accept other appraisals.
The LTV amount is determined by the lender, your qualifications, and loan terms you choose. If you're not happy with it shop around. Nothing stopping you from talking to other lenders. The rates vary, terms vary, it's not all the same.
Unless you have a deal in the works, need cash fast, have other debts, or have fears about the market a conventional cash-out ReFi is the optimal choice. The only negative is the closing costs but it's just baked into the mortgage. Cheers.
@Alisa K. The majority of lenders require a 6 months seasoning period.
Seasoning is designed to prevent the constant flow of homeowners looking to refinance, over, and over, and over. That situation would be extremely risky for a lender. The only way around that is doing Delayed Financing. It has pros and cons but in my opinion just wait the 6 months and get a better rate. Yes - you'll get a new appraisal with said lender. No - they won't accept other appraisals.
The LTV amount is determined by the lender, your qualifications, and loan terms you choose. If you're not happy with it shop around. Nothing stopping you from talking to other lenders. The rates vary, terms vary, it's not all the same.
Unless you have a deal in the works, need cash fast, have other debts, or have fears about the market a conventional cash-out ReFi is the optimal choice. The only negative is the closing costs but it's just baked into the mortgage. Cheers.
@Alisa K. congratulations on your recent purchase. The original amount you paid may or may not reflect the appraised value of the home. I assume you did your due diligence when making an offer and assessed other comparables to gauge an appropriate asking price? Whether you plan to use a conventional cash out-out refi, HELOC, or home equity loan, an appraisal will have to be ordered to determine the value of the property. The six month seasoning period you are referring to is only applied to those who have a previous mortgage on their home. In your case, since you bought the property all cash, you can take your cash out of the property immediately (delayed financing). There a certain rules/restrcitions on delayed financing that I would look into more thoroughly. The 80% or 85% LTV is a general rule used by most lenders when refinancing a property. You need to shop around and determine which lender will offer you the best rate and terms. Hope this helps!
I bought a home with cash. I did not have it appraised at the time of purchase. The house has appreciated even though it has not been 6 months and I'd like to get my cash back to purchase other properties. First, do I have to wait for 6 months and why? Second, can I pull out the cash based on the newly appreciated value or do I have to use the original amount I paid? Third, are there loans available for 80% LTV in this situation. Calling all lenders...I'm looking to refinance this baby!:)
In order to get Fannie Mae backed money, you have to wait at least 6 months. Why? Because he who has the gold makes the rules.:) The real answer is to prevent churning or constant refinances in an appreciating market because the secondary mortgage market is built on mortgage backed securities and lenders would have to pay their yield spread back to the investors if the loans kept coming out of the security.
You can go with a DSCR loan that doesn't require 6 months seasoning, but the terms are not as favorable as they would be if you waited and since you're playing the long game with the property, it's best that you wait.
80% is available, but again, the terms are not nearly as favorable as they would be at even 75%.
If this is a primary residence you can cash-out at 80% LTV (based on newly appraised value). Max LTV of 75% if investment property.
Within the first 6 months, delayed financing will only allow up to the purchase price, not the new appraised value right?
Good point @Stephanie P - "The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan (subject to the maximum LTV, CLTV, and HCLTV ratios for the cash-out transaction based on the current appraised value)."