Houston Cash Out Refi - No 6 month seasoning period

3 Replies

I am looking for lendors or local banks in Houston, TX that will do portfolio type loans for a cash out refinance or no cash out refi without the 6 month seasoning period. Does any one have any suggestions? 

I have 2 properties that need to be refinanced off of a hardmoney loan. 

Also, is it possible to refinance out of the hardmoney loan as soon as the property is fixed up? For example. I closed on the property May 1, the house is fixed up and listed on the MLS. June 1, Would I be able to refinance to a traditional type mortgage or any other low interest mortgage to pay off hardmoney lender but be able to hold on to the property at a lower rate until it sales?

@Hunter Byler

A minimum of 6 months seasoning before lending off an appraised value is a form of risk management that the vast majority of lenders have written into their guidelines.  

Many lenders say they don't have seasoning requirements which is there competitive advantage but they will only lend based off of the purchase price + renovation costs until you've hit their 6 or 12 mo min.  This is fine if you just need to get into a better interest rate and are worried the property could sit for sale for many months.  However, I know of 1 in particular who is willing to consider using the appraised value after 3 months of seasoning so options do exist.  This distinction if of course most important when you need to use cash out proceeds to pay down credit cards used for rehab or keep the ball rolling and re invest for more flips/investments.  

Do you mind sharing the interest rate your paying with that HML currently?

Do you feel that the property will most likely sell to primary residents or perhaps investors?  Either way, in order to get REFI and potentially take cash out now, before most bank's 6 or 12 month marks,  you'll need either a tenant in place or at least a letter of intent from a future tenant with a lease agreement and start date.  

Hope this helps.  

All the best, 

@Alex Bekeza thanks for reply! If a lender did do a cash out for purchase plus repairs refi would it be a high interest rate? I had heard of someone doing this but didn’t know it was possible. I have two differlend loan terms for the two properties

Property #1 - 3points 12% covered 100% purchase and 100% remodel (up to 70% ARV) 6 month term

Property #2 - 2 points 10% covered 90% purchase and 100% remodel. 12 month term 

Commercial rates on SFRs are somewhere between conventional full doc loans and hard money. On average range from the high 5% to low 8%  plus or minus depending on some specific adjustments based on property type, location, credit, experience, etc. I'll shoot you a PM with more details because I can't really be looking like I'm selling you something on the forums but figured this was good info for anyone tuning in to the conversation.  

All the best,