Real Estate Broker · Hartsville, SC · Member since 2015 · 174 posts · 69 votes
I've been working on doing a cash out refinance deal, and everything was going well until today. Got a call from the bank saying that since the home was listed for sale within the past 6 months that Fannie Mae wont accept the loan... thats the first I heard of that rule. Has anybody else run i to this? I know this game we play is an ever learning process, but this caught me off guard...
Lender · Salt Lake City, UT · Member since 2012 · 714 posts · 169 votes
10y
Yes this can be a factor in a FHA loan decline. Always talk to a mortgage broker friend about these types of things before you make assumptions. Seasoning issues are another things that many people forget to consider when buying properties that they want to later refinance. Every loan type has its own set of requirements so always ask a mortgage broker friend first!
Lender · Salt Lake City, UT · Member since 2012 · 714 posts · 169 votes
10y
Yes this can be a factor in a FHA loan decline. Always talk to a mortgage broker friend about these types of things before you make assumptions. Seasoning issues are another things that many people forget to consider when buying properties that they want to later refinance. Every loan type has its own set of requirements so always ask a mortgage broker friend first!
Real Estate Broker · Hartsville, SC · Member since 2015 · 174 posts · 69 votes
10y
I've seen seasoning being discussed, but what surprided me was that I didn't actually buy or sell the house. I just listed it for a couple months, and then decided that I would rather refinance it and keep it. Now i have to wait 6 months from the date i took it off the market to be able to refi.
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
10y
You may find that listing can also be used as a comp if it is low. Years ago I purchased a house at a very nice price and immediately listed it for resale at ~$20k more than I paid. The previous owner had completely rehabbed the house, roof, kitchen, everything and was transferred. He never lived in the rehabbed house. I was comfortable holding this long term as a rental (I still own this house and it is performing well) but I would have been happy to take the quick profit from the flip. I found a tenant in a couple weeks and took the home off the market. A couple months later I did a cash out refi. The house would have appraised significantly higher than the price I had listed it at but the appraiser used the price I had listed at as the best comp (hard to argue with his reasoning.) My loan was approved (it was years ago) but for a lower amount than I had expected.
I found this on another thread here. This is Fannie Mae's actual guidelines for cadh out refi's. My bank was wrong. You certainly can refi if listed within 6 months, but only 70%...
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
10y
Print the info cited above and take that to the loan officer, smile, be nice and ask if the underwriter might reconsider in light of the new information.
Remember, Whenever we fail to ask, the answer is always NO.