financing after all cash purchase

6 Replies

I just purchased a home at courthouse auction all cash, part of the money was gifted. What financing options do I have to get the money back out? A lender I spoke with said the bank will want to know where the money came from but I am not understanding this as the deed is in my name? Is there a minimum time requirement before you can do a cash out refinance after purchasing the home? Thanks!

With conventional there is 6 month wait. With hard money there should be no wait.

questions on where money came from is BS in my opinion.  If they ask you that then look for another lender.

@Jeffrey Townsend

Delayed financing requires the funds to be sourced and you will not get the gifted funds back. You can pull out up to a max of your initial purchase plus closing costs minus the gifted funds. This is a Fannie Mae guideline and another conventional lender will have to follow this rule. 

After 6 months you can cash out without this limitation. You can start the process prior to 6 months and cash out right afterwards.

@Jeffrey Townsend

It is still based on appraised value, but you can’t get back anymore than what you paid initially did the property. 

For example;

Purchase price - $60k on a SFR investment.

Closing costs - $4k

Initial purchase - $64k

Renovations - $15k (not in your initial purchase) There are ways to attempt to get renovations included, but there is no guarantee as Fannie Mae is cracking down on including renovation s.

New appraised value - $120k

LTV allowed 75% ($90k) but because you are limited to your initial purchase you can only cash out $64k (possibly the $15k as well, if it is included on the closing docs of the initial purchase and structured in a way that the underwriter accepts it)