I was given issues trying to pull a HELOC on my SFR after rehab because of "mortgage seasoning"
I purchased this SFR with conventional 80% loan.
After rehab, I still was able to pull 36k HELOC with a 6.0% rate. (was aiming for 50k)
Lender said I haven't had loan more than 12 months and under valued the property. But said they were doing me a favor by not valuing
property at the original purchase price... which they should have due to not owning the property for more than a year..
anyone else have issues with what they call "mortgage seasoning"?
Going forward I will do a cashout refi instead of HELOC.
Cash out is probably a better way going forward. If you do HELOCs, they can screw your credit up if you borrow 100% of them just like maxing out a credit card. The flexibility of a HELOC is nice but they shouldn't be maxed out long term.
How long have you had the 80% loan? Seasoning is different for different banks. Sometimes it's 6 months, other times it's 12 months. Before the seasoning period, they only want to give you original purchase price. After that, they will base off of appraised value.
A cash out refinance only requires 6 months seasoning and you can start the process prior to the 6 month mark. Keep record of all the improvements if need be to prove the value increase.