Naperville, IL · Member since 2016 · 11 posts · 8 votes
I understand there is a seasoning period for BRRRR method before you can refi when you use conventional funds to purchase the property... but what if I purchase and renovate using cash? Can I get a cash out mortgage as soon as the renovations are finished, or is there still some seasoning period?
@Kathryn Pierce the typical seasoning period is 6 months. We work with a lender in Indy that does not require a seasoning period, so the simple answer is it depends on the lender.
@Kathryn Pierce the typical seasoning period is 6 months. We work with a lender in Indy that does not require a seasoning period, so the simple answer is it depends on the lender.
My understanding is the Fannie Mae/Freddie Mac rules are that a 6-month season is required from your original close date until the note is closed.
The seasoning is only required to get cash out based on the appraised value. You can close a mortgage sooner, if you just want to get out the purchase price plus your reno costs.
Also, this is only for conventional mortgages.
@Kathryn Pierce, I'm not sure why Mike was referring to a "note" (if you're paying all cash), but Fannie will let you use their "Delayed Financing Exception" as soon as you're ready. The best chance you'll have of getting ALL your purchase and closing price back without seasoning (but not your additional rehab cost) is if you manage to get a 30% discounted bargain on day one!
Seems to me though that as long as you've arranged financing BEFOREHAND, you shouldn't need to pay all cash at the start? ie. Just put 25% down, and you've STILL got 75% of your cash to IMMEDIATELY go and find 3 similar deals!
Or is 4 simultaneous deals not enough for you, every six months? Cheers...
Most lenders that you would utilized for a Cash out refinance whether it be a portfolio or asset based lender will require a seasoning period. Some are as low as 3 months and some are as high as 12 months. My lender is 6 months to the day I purchased the home. It doesn't matter what type of funds you utilize to initially purchase the home, it matters how long YOU physically owned the property
Not all lenders require seasoning periods and the way you purchase it doesn't change what requirements they have. We provide cash-out short term loans based on the updated appraisal price so you can use your money somewhere else.
Not all lenders require seasoning periods and the way you purchase it doesn't change what requirements they have. We provide cash-out short term loans based on the updated appraisal price so you can use your money somewhere else.
Would be interested in hearing more about these. Feel free to PM and connect.
Is it safe to assume that anytime you plan to flip a property, you will be excluding FHA buyers within the first 6 months?
not 6 months, it is 3 months. 90 day FHA flipping rule meaning an FHA buyer cannot go in contract until the 91st day after the original recorded deed date.