Hey Mortgage Pro's,
What LTV are lenders offering now on a cash out refi for a primary owner occupied in NY? Specifically in Westchester county.
Also what's the average seasoning time to refi?
not too sure it matters about the state, but Fannie Mae conventional guidelines now need 80% LTV for cash out refinances. it used to be 85% until a few months ago. and 6 months is still required unless you can qualify for Delayed Financing Exception. here are those requirements (i've highlighted some of the more important items that are harder to fulfill):
The original purchase transaction was an arms-length transaction.
- For this refinance transaction, the borrower(s) must meet Fannie Mae’s borrower eligibility requirements. The borrower(s) may have initially purchased the property as one of the following:
- a natural person; an eligible inter vivos revocable trust, when the borrower is both the individual establishing the trust and the beneficiary of the trust; an eligible land trust when the borrower is the beneficiary of the land trust; or an LLC or partnership in which the borrower(s) have an individual or joint ownership of 100%
- The original purchase transaction is documented by a HUD-1 Settlement Statement, which confirms that no mortgage financing was used to obtain the subject property. (A recorded trustee's deed [or similar alternative] confirming the amount paid by the grantee to trustee may be substituted for a HUD-1 if a HUD-1 was not provided to the purchaser at time of sale.)
- The preliminary title search or report must confirm that there are no existing liens on the subject property.
- The sources of funds for the purchase transaction are documented (such as bank statements, personal loan documents, or a HELOC on another property).
- If the source of funds used to acquire the property was an unsecured loan or a loan secured by an asset other than the subject property (such as a HELOC secured by another property), the HUD-1 for the refinance transaction must reflect that all cashout proceeds be used to pay off or pay down, as applicable, the loan used to purchase the property. Any payments on the balance remaining from the original loan must be included in the debt-to-income ratio calculation for the refinance transaction.
- Note: Funds received as gifts and used to purchase the property may not be reimbursed with proceeds of the new mortgage loan.
- 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/HCLTV ratios for the cash-out transaction based on the current appraised value).
- All other cash-out refinance eligibility requirements are met with the exception of continuity of obligation, which need not be applied. Cash-out pricing is applicable.
@Patrick Britton thanks for taking the time to highlight the key points, this helps!
@Nick G. yeah no worries. things MIGHT be different with a portfolio lender though...but i have seen those guys ask for even lower LTV - 70%...
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