As I have read there can be two seasoning issues title seasoning and mortgage seasoning.
Is this correct that in a lease option deal since the new buyer does not have the title or the mortgage in his name? When he “lease options to buy” to a new buyer there would be no seasoning issue considering the original owner has owned the property for more then 12 months.
In a sub2 deal there would be title seasoning since the Title is transferred under your name, and you have to hold the property for then 6-12 months before you can flip it
(Considering the new buyer has a conventional loan). Any comments on the above would be appreciated, also is there a link on the web that discusses this in detail for both scenario.
There is no such thing as “mortgage seasoning.”
Title seasoning is how long a person/business has been on title.
Sometimes, this affects the buyer’s ability to get a loan because the seller has no title seasoning (ie, they haven’t owned the property for X number of months). How long the seller must have been on title (how many months) is determined by the lender. Some say 3 months, others 6-12 months, and I’ve seen one that required 24 months.
However, there are several lenders that do not require any title seasoning. Also, the buyer’s credit will also sometimes determine the title seasoning requirements. As credit scores go down, lenders tighten up the loan requirements. A 700+ credit score buyer probably would not have to worry about title seasoning.
Thank you for your response appreciate.