avoiding 6 month seasoning requirement

15 Replies

Hello folks,

Under contract on a 2nd home with 300k cash due to the hotness of the area, I'm not interested in waiting 6 months to "season" before I'm allowed to cash out refi. Also not interested in the Delayed financing exception as it takes 25% down, has anyone quit claimed a property from their LLC to their personal name to avoid this? Any idea's?

Thank You!

James

That 6 months of seasoning rule is bank specific. Seek out another bank who won't require seasoning. Your best bet is to find one that services their own loans. 

it's a rule if they want to sell the loan, if they keep their loans then they can make whatever rules they want.  

Originally posted by @James Wiltz :

Hello folks,

Under contract on a 2nd home with 300k cash due to the hotness of the area, I'm not interested in waiting 6 months to "season" before I'm allowed to cash out refi. Also not interested in the Delayed financing exception as it takes 25% down, has anyone quit claimed a property from their LLC to their personal name to avoid this? Any idea's?

Thank You!

James

They won't require ANOTHER 25% down - they'll just need you to RETAIN 25% equity after cash out. ie. if it ALREADY appraises at $400k, they should NOW give you back ALL your $300k cash!

What's that? It WON'T appraise at $400k? Hmmm. I hope you weren't sucked in by the "hot" hype.

it will appraise easily for more than the cost + refurb is, the question is trying to do this cash out refi in 2 months instead of waiting the 6 month seasoning period

Originally posted by @James Wiltz :

it will appraise easily for more than the cost + refurb is, the question is trying to do this cash out refi in 2 months instead of waiting the 6 month seasoning period

That's what I was talking about. The "Delayed Financing Exception" goes by their APPRAISAL, not your purchase price! Get it? As soon as it appraises at $400k - you apply for your $300k* back!

* But, you can't cash out MORE than your purchase price before their seasoning period. Cheers...

Originally posted by @James Wiltz :

Yes understood, and that’s what the original question is, I’m sure there is a way that this can be accomplished

So, if your deal was good enough, you CAN apply for that "Delayed Financing Exception" straight away - without having to come up with ANY further deposit. Why did you dismiss that out of hand?

Even if it doesn't appraise for a full $400k, just find out what they WILL lend you against it NOW!...

Just had this same issue wth my deal and it was just bank specific. You need to find a local bank that portfolios their loans and doesn't sell them in the secondary market. I just googled community banks in your area and came across three banks I would call and ask to talk to their portfolio manager or loan officer. Tell them what you are trying to do and you will get to who you need to talk to. They will typically have a 5-15 yr balloon amortized over 30 years. Pretty common. Newbridge, Community bank and First community bank are he ones that came up within google.

@James Wiltz

I don't think you were asking the wrong questions.  I'm just not certain you liked the answer to the situation.  If the bank is going to sell to Fannie or Freddie, they have to create loans that fit their guidelines.  There are lenders that will lend without the seasoning requirements, but you'll mitigate their risk (and their inability to sell the loans to Fannie or Freddie) by paying a higher rate and fees.  

That's just the way it is. If you'd like more information, feel free to PM me.

Stephanie