Options for second primary res loan within 12 months?

[Diana Frasier]

Hi BP Friends,

I am hoping to find some guidance for my current issue below:

- I did a cash out refinance that closed in August of 2021 on my primary residence. I intend to turn it into a long term rental

- I would like to purchase another home as my new primary residence. I plan to stay in my current home while doing minor reno and finding tenants so will be right at 12 months when I move

My question - can I actually close a loan since im less than 12 months from my prior refi? Do lenders check this or is it somewhat discretionary? Can I go private lender?

Im willing to put 20% down just to be able to close it since the house is fabulous

Thanks!!

[Tsipora Smith]

Yes, we do check this sort of thing. But if you're willing to put down up to 20% you could simply purchase it as an investment property or second home with a traditional lender no problem. 

[Andrew Postell]

@Diana Frasier when you purchase a new primary home you pledge to move into it within 60 days of closing and occupy the property.  So maybe there's some timing there that a good lender can navigate around?

[Albert Bui]

There are general expectations of 12 months + of occupancy however in practice we’ve found that min 6 months of payments to be made are required before the “same,” lender will allow another primary residence application to be applied for. This is from experience and feedback from actual underwriters even in situations  where your lifestyle has changed such that you need to or want to purchase a new primary residence.

The applications under 6 months from primary residence to another primary residence are usually contested heavily but in situations that warrant an “exception,” the borrower has been able to get another primary done after 3 months. 

In our specific situation the borrower refinanced as a primary. Shortly there after there was a shooting nearby and that along with family size aspirations were utilized to justify a purchase of another primary in a safer neighborhood. The exception was granted by the same lender (so no we did not submit this else where) and we were approved and funded.

Best of luck in your mortgage planning.

Originally posted by @Diana Frasier:

Hi BP Friends,

I am hoping to find some guidance for my current issue below:

- I did a cash out refinance that closed in August of 2021 on my primary residence. I intend to turn it into a long term rental

- I would like to purchase another home as my new primary residence. I plan to stay in my current home while doing minor reno and finding tenants so will be right at 12 months when I move

My question - can I actually close a loan since im less than 12 months from my prior refi? Do lenders check this or is it somewhat discretionary? Can I go private lender?

Im willing to put 20% down just to be able to close it since the house is fabulous

Thanks!!