Hi everyone! I was hoping someone could help me understand this issue I have run into... or send me a link where I could read more about it.
My husband and I bought a duplex with an FHA loan in Dallas for $206K March 2016. One side has been our primary residence since then (we rent the other side out).
I find myself bored on maternity leave in May of 2017 and decide to call Wells Fargo Home Mortgage to ask about a cash out refinance because I hear that the duplex next door to me appraised for $265K. The WF home mortgage Rep gets me all excited saying that it looks like we can refi and pull out around $10K cash! So we fill out the application but then he calls and says that the underwriter won't let us do a cash out because the duplex isn't listed as an investment property? I thought I remember not being able to label it as an investment property when we were applying for our FHA since it needed to be our primary residence for at least 1 year. So apparently we can only do the refinance... he said that he didn't know this either and told me to google it, but I'm having a hard time finding this exact verbiage.
Can anyone explain this to me or point me in the right direction for some decent reading material on this particular subject?
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What is your intention? Will you be occupying this property for the next 12 months? Or are you house hacking and going to move in the next year? This would dictate whether you need to do this as a primary residence or investment. Either way, you can absolutely do a cash out refi (assuming you qualify).
Big banks are sometimes impossible to deal with. Chase, Wells, BofA, Quicken, etc. They all have overlays, (most of) their LO's are idiots, and (most of) their underwriters are trained to not think for themselves.
If you need a referral to a rockstar lender in TX, shoot me a PM.
Even if you can't do a cash out, it might still be worth refinancing if you are paying PMI with your FHA loan.
Hi @Christian Montalvo ,
That makes no sense. But Texas has a bunch of special state-specific rules pertaining to cash out refinances that I know nothing about (just that they exist). @Andrew Postell , is Christian running afoul of the Texas cash out refinance rules, or is Wells just Wellsing as big banks are prone to doing?
@Christian Montalvo Given Texas 50(a)(6) there are many restriction on cash-out on primary residence. You are restricted from doing it as a FHA. You only option would be a conventional refi. You are not going to get cash out. Your best option is to do a rate-term refi into a conventional, so you get get rid of the PMI soon.
thank you Upen! I appreciate your response!
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