I had a question as this is my first BRRRR. I was wondering if everyone had to wait the 6 month seasoning period to be able to refinance. It would leave me with more for myself if I am able to shortened this, but haven't found anyone to be able to shorten this to say 3-4 months. Is this even possible?
Hi @Leonel Lerena ,
Typically it is a 6 month period, especially if you wanted to use the ARV of the property. I've heard stories of other people seeing shorter, but never actually experienced it with the guidelines given.
@Leonel Lerena the seasoning requirements are a pain for sure when you're trying to get out of a high interest rate hard money loan, and for the most part, 6 months is the shortest amount of time you'll find. With that being said, there are options that may make sense if your paying a very high HM rate say 13-15% or more. If this were the case, I'd suggest a 12-24 bridge loan. However, if you're not paying 13% or more it really is the best bet to wait because along with a new loan comes new fees and paying those on a bridge and then a long term loan would negate any cost savings. I hope that helps.
@Leonel Lerena if you are refinancing a HML and just doing a rate and term refinance with a lender that is direct to Fannie Mae, you don't have to wait 6 months. If you are using a lender that is not direct to Fannie and they have overlays, they may say 6 months. Refinancing a cash purchase or trying to do a cash out refinance to pull some of your equity out, you would have to wait 6 months either way.
@Leonel Lerena We can do a cash out Refi after 3 months. Our constraints would be up to 75% LTV up to 100% of your costs. If after 6 month then we can do up to 75% LTV. This would be in our Rental program which does have some guidelines we need to hit based on the DSCR calculation, which needs to be 1.2. I would be happy to discuss with you anytime and go over the program or send you an email with the guidelines.
Short answer is 3 months seasoning is what our company can do for a rate/term or cash out. If you used purchased the property cash and did renovations cash then you can refinance anytime within the first 6 months and we consider this to be a delayed purchase.
@Matt Hiltner Our rates are well below 13% and if that is what you are paying for your bridge financing, I would be happy to discuss our products. You are correct that seasoning periods are a pain, but our program has the ability to refinance after 3 months with a few constraints I explained above. Are you only in the Denver market? I am based out of Tucson, AZ but we can lend in 44 states. BTW, I actually do a few golf trips to Denver each year as I love it there. I have some family that have recently done some properties in Wash park and it is crazy what some of those properties are going for. Hope this helps a bit.
Rate and term can refi almost immediately. I've done it quite a bit.