Investor · DE, PA · Member since 2017 · 11 posts · 0 votes
Hey! Got some confusion with refinancing. If I buy a house with cash and fix it up, would I be able to refinance with the regular bank if I don't have a w-2 job? Thank you!!!
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
7y
@Taras Kokhman the issue with not having a job is really for Fannie Mae and Freddie Mac loans. Those loans are "government" loans (I'm oversimplifying this) so they require a job. But "portfolio" or "commercial" loans do not. You can certainly purchase a home with cash and refinance after with no job using commercial/portfolio style money (private money too). I would HIGHLY recommend for you to find a couple of these lenders and get "prequalified" so you know their terms and conditions of the loans. Hope this helps!
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
7y
@Taras Kokhman the issue with not having a job is really for Fannie Mae and Freddie Mac loans. Those loans are "government" loans (I'm oversimplifying this) so they require a job. But "portfolio" or "commercial" loans do not. You can certainly purchase a home with cash and refinance after with no job using commercial/portfolio style money (private money too). I would HIGHLY recommend for you to find a couple of these lenders and get "prequalified" so you know their terms and conditions of the loans. Hope this helps!
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
7y
@Taras Kokhman rates are important to know but so are TERMS. If you only ask about rates you won't know the whole picture. If one offers a 6.5% rate and another offers 7.5% rate...which is better? You won't know for sure unless you ask about the TERMS. You need to ask about ALL the terms to these types of loans. Is there a prepayment penalty? Does the loan balloon? How long of a term is it? How much equity do you require me to leave in the property? And so forth. Make sure you get EVERYTHING out on the table with these loan types. They can run the gambit on terms and rates.
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
7y
It's more complicated than all of this, but in order to do a cash out refi with a conventional lender, there are two things to consider:
-If you bought with "cash," was it your cash? Was any portion of it borrowed (other than a HELOC)? If it was truly your cash and was an arm's length transaction, you can immediately do a delayed financing. There are additional stipulations for loans like this, so take a look at the guidelines, and if you want to do one, immediately start looking for lenders that are familiar with the program, because it can take some time to find a bank that knows how to close these loans.
If you don't qualify for delayed financing, you have two options. Wait six months for the property to season and refi then- from a financial standpoint, this is usually the best way to go. If you are trying to scale and need the cash, it might be strategically difficult to wait. Your second option is to find a portfolio lender who will work with you without waiting for seasoning. This, too, can be difficult. There are exceptions, but most portfolio lenders use the same criteria for mortgages that conventional lenders do. If you want a loan outside of those criteria, you need to have an excellent relationship with that lender. Portfolio loans typically have less favorable terms than conventional.