Question For all you Refinance PROS

7 Replies

Good morning BP,

Im making good progress with the renovations on my duplex, and I expect it to be done by Oct. 1st. By then it would be almost 2 months since note date. 

How should I proceed with a refinance? The mortgage company says 6 months before a cash out refinance, some people say 3 months is possible, and based on a Podcast I listened to this morning it was possible right away before the renovations even started.

Thanks in advance!

-Brian

Depends on the type of mortgage and the restrictions in your note. Some banks require 6 months before you can lease or refinance- so you have to live there essentially as a primary residence for 6 months. Some banks let you refi any time. FHA/VA are much more strict, conventional loans may provide a little more leeway. Take a look at your loan documents from when you closed and they should tell you exactly what you can do and when.

@Jessica Zolotorofe Thank you. It is through Fannie Mae, which requires 6 months before a cash out refinance, but am I able to go to another broker and see if they can get me a refinance sooner? How does that all work?

Mike,

Do you live in the same state as where the property is located? There are many local community banks that will allow you to refi cash out based on fair market value after a tenant is place. My suggestion is start there  - good luck!

@Bob Green Thank you, yes I reside in the same state. I went conventional and the loan is through Freddie mac/fannie mae. They require a 6 month wait period. How does a refinance work if I went through my local bank? 

Local community banks often offer portfolio loans meaning they hold the loan in house instead of selling in the secondary market(Fannie/Freddie).  F/F require 6 months seasoning. But, if the bank holds the loan in house they may have different seasoning rules. And, because of this, no seasoning period to refinance cash out. 

@Bob Green I had reached out to the bank (New Penn Financial) and they said they are required to have the 6 month seasoning because it is F/F. Sorry for my questions, sometimes I need these things broken down in order to understand.

So im not able to go to my local bank and have them refinance the loan?

It really does depend upon the bank.  You’d be wise to call all the lenders around.  I have called 25 or so, and then I built a matrix for future reference.