Is there a seasoning period after paying cash?

Question

If I purchase a house using my own capital is there a 6 month seasoning period before I can cash out refi?

Joe Villeneuve · Answer

Not true. There is still a seasoning period. The seasoning period isn't based on any current loan, it's based on the next loan...as in the refi loan. the term "cash out" refers to any equity, over and above any current loans you want to convert to cash. If all you want to do is refi to get better terms on your current loan, that isn't a cash out, that's a "rate and term" refi, and that can be done immediately...but only up to the amount of the existing loan amount.

If you paid all cash at the start, and there is no loan in place to refi, then there is no "rate and term" possible...and it's considered to be all "cash out".

Matthew Irish-Jones · Answer

@Ryan Cleary depends on the loan type. Residential lenders like a 6 month seasoning period.

Commercial lenders don’t normally care. Especially if you have a good relationship and pay your bills on time.

Rich Ramjatan · Answer

@Ryan Cleary

I believe it’s 6-12 months , unless you do delayed financing.

Alejandro F. · Answer

@Ryan Cleary

You can do Delayed Financing and avoid the seasoning period. However, there are very specific requirements that must be met (see Fannie Mae delayed financing requirements). Delayed Financing loans are essentially treated as a cash out refi loan. Hence, you may see a higher interest rate and lower LTV than a standard, conventional loan. I'm in the process of doing this myself. One challenge I've found is actually finding lenders that are familiar with delayed financing.

Mack Benson · Answer

Buying in cash would not have a seasoning period. The seasoning period is in place from a lender, if no lender is involved then no seasoning period. If the property value for cash out refi is quite a bit higher than your purchase you will likely need to justify it somehow if you do it quickly but that is separate from a seasoning period.

Is there a seasoning period after paying cash?

Is there a seasoning period after paying cash?

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