Investor · San Jose, CA · Member since 2015 · 52 posts · 9 votes
Hi BP Members,
Here is the situation,
I own an investment property since 2017. I recently did a cash out refinance which paid off the initial mortgage and I got some cash out. Now, I want to refinance again and lower my rates. The lender is saying there has been 6 months wait between cash out and then subsequent refinance. I couldn't find any fannie mae regulations for this.
Does anyone know if there is any such regulations or this is just an overlay which the lender has created?
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
7y
the lender that did your last loan is likely afraid of facing an " EPO" ( early payoff penalty ) which would require them to payback any rebate they earned when they closed your last loan ...most loan programs have this stipulation and these tend to fall off at the magical 6 month mark
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
7y
Technically you can refinance in less than six months. However, it's an ethical violation for reasons mentioned. I would turn away the business, unless the old lender was one of the big banks. I'm fine with sticking it to them. :)