I purchased a house recently that had some issues and required a cash deal. I have now completed the repairs and had planned to get a mortgage on the property to fee cash for another house. However, I am being told I have to have owned the house for 6 months before I can take cash out? Has anyone else heard of this? Any reasonable ways around it?
Hi @Stephen Reyes yes, it is a Fannie Mae/Freddie Mac guideline. Unfortunately, there is really no way around it that I am aware of.
There might be Non-QM loans that will let you free up the cash quicker but if the lowest rate is the most important thing to you, then conventional is the way to go.
Yes, there is a seasoning period with most lenders. 6 months is common. You can probably take out a % of the purchase price, but not the new value...before the seasoning period the lend on the lesser of loan to value and loan to cost.
Hi @Stephen Reyes yes, it is a Fannie Mae/Freddie Mac guideline. Unfortunately, there is really no way around it that I am aware of.
There might be Non-QM loans that will let you free up the cash quicker but if the lowest rate is the most important thing to you, then conventional is the way to go.
Hi Stephen! I will agree with others that the 6 month waiting period (termed seasoning) is pretty standard. You might be best to try a local community bank or credit union that wants to keep the loan on their books, versus sell it off on the secondary market (Fannie Freddie type loans). They may be much easier to deal with in terms of underwriting and terms. Another thing to consider is having someone give you a private loan so there is a lien on the property. At that point it becomes a rate and term refinance instead of a cash out refinance which can qualify for lower rates often, and easier underwriting because you already have debt in place on the property.
I purchased a house recently that had some issues and required a cash deal. I have now completed the repairs and had planned to get a mortgage on the property to fee cash for another house. However, I am being told I have to have owned the house for 6 months before I can take cash out? Has anyone else heard of this? Any reasonable ways around it?
When did you purchase the property? The other respondents are correct in that most lenders do require a seasoning period for investment properties and there's little that can be done about it. The earliest I've seen and worked with is 90 days seasoning and for value, the lender would use the lesser of the acquisition price or appraised value (Non QM loan). Hope this helps! Don't hesitate to reach out if you have any other questions.