I'm finishing a client's new-construction home by end of Dec. They borrowed hm and used some cash/cc for additions/changes during construction. HM loan is 200k plus additional cash/cc debt of 30k, Final appraisal is approx 450k. Questions: 1) Can they cash-out on refi on long-term mortgage to recover cash/cc debt? 2) At what stage should they start the refi process? 3) Can closing costs be rolled into final loan? 4) Any referrals on Texas-based lenders would be appreciated.
Excellent credit scores, job histories, etc. Home is in Texas.
The borrower must have held legal title to the lot for at least 6 month prior to the closing of the permanent mortgage for cash out.
@Fred Garza thanks for posting here. Here are your answers:
1) There MIGHT be a way to do this. I've explained the concept here in this post: HERE. I would probably need to speak with them directly on how to structure this, including creating a company. I'm not sure why they didn't just get the money from the HML but I would imagine that the HML would still be willing to grant them funds for those change orders. Ask and see what the HML states. That would be the easiest solution.
2) They should start the refinance now. Before now. Get them on this right away. Most banks take a minimum of 30 days to complete a new construction loan...and you have some significant holidays in the way. They need to start ASAP.
3) Yes, closing costs can be rolled into the loan. Since we are refinancing a HML then as long as their is enough equity (which there appears to be) then you can roll in the closing costs.
4) I might be a little biased on the Texas based lenders but let me know if there is anything I can do to help.
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