I am new investor. I just purchased an investment property in Texas with cash using a line of credit. The only lenders I have found so far will do a loan for 70%, based on purchase value and documented reciepts from the rehab. I want to do a cashout refiance based on the appraisal value without waiting for the six months seasoning period. Is this possible?
I don't know of any lenders that don't require the 6 month seasoning, but there are certainly lenders out there that will go up to 75% LTV
I own a home in Montgomery TX and was told in 2012 I could not do a cash out refi with traditional lenders if it was an investment property. I was told only primary homes in the state of TX qualify for cash out refi. Hopefully the TX lenders guidelines have evolved since 2012 but your best bet is to go with private money lender.
There are lenders that don't have a title seasoning period.
We have done cash out refinancing for 85% of the appraisal value of a rental home, however this was done between our LLC and a commercial lender that we already have a track record with and have multiple loans with them. It happened to be after we owned the property for a couple of years, so we didn't test the seasoning factor.
2017 Non-Owner Occupied Cash Out Refinance Rules
Here are some recent rules and guidelines for cash out refinances on rental properties as set by Fannie Mae:
§The maximum loan-to-value is 75% for 1-unit properties and 70% for 2- to 4-unit properties. These maximums are lowered by 10% for adjustable rate mortgages.
§If the property was listed for sale in the last six months, the maximum LTV is 70%.
§The property must not be listed for sale at the time of loan application.
§The property is not eligible for a cash out refinance if it was purchased within the last six months. There is an exception for properties that meet the Delayed Financing guidelines.
Delayed Financing Rule:A rental property that was purchased within the last six months is eligible for a cash out refinance if:
§The new loan amount is no more than the original purchase price plus closing costs.
§No mortgage financing was used for the purchase, unless the financing was on another property.
§The transaction was arms-length, meaning the seller did not have a pre-existing relationship nor a financial interest in the sale besides the sale itself.
§The buyer has a final Closing Disclosure (final settlement statement) showing the purchase price and other details of the transaction.
@Craig Wurdeman The best option you are going to find is Delayed Financing. This will allow you to get the lower of - purchase price or 80% LTV of appraisal. If the appraisal comes in high and you actually want to get additional money out, then you will have to let it season for 6 months.