Just wanted to check what the seasoning requirements were for obtaining financing on a foreclosure that I recently purchased with cash. I am occupying this house and do intend on staying here at least two years before selling. I would like to pull out as much cash as possible without taking a hard hit on the rate. I beleive I may be able to go to 70% LTV without a taking a big hit. I have heard various answers from no seasoning required, up to one year. Also, how is the appraisal change when seeking financing not that long after the original purchase, which was at a very substantial discount; compared to having a year, etc… of seasoning? Thanks for in advance for the input!
seasoning requirements on owner occupied SFH owned free and clear
Using conventional lenders requires 6 months seasoning to get cash out.
The other problem would be that you have no “loan continuity”. This means that you’re not currently on an existing lien. A new rule that Fannie came up with earlier in the year was that if a person was refinancing that they had to have been on the existing loan note in addition to being on title.
If you have a free and clear property they will allow up to 50% ltv after the 6th month. After 12 months no restrictions.
The other thing I’m worried about is that I was laid off from my 9-5 and have been focusing stricty on my business. I have increased the cash flow from my rentals, although I don’t show much income on two consecutive tax returns (from the rentals before depreciation). Also, I used my credit cards to finance several projects including the rehab and a part of the purchase price of this SFH. My credit score is now in the low 600’s, due only to the amount of credit being used. I already have a FHA loan on one of my rentals; so I am not sure how easy it will be to get financed, even at 50%. What is the best way to obtain financing for this property; use those funds to pay off my credit cards; and still get a decent rate. I have ran into this before, and it seems that the underwiters use your current credit score, even if the disbursements from closing are going directly to the creditors. Is there anyway to work with an underwriter under these circumstances?
I am looking to actually take out a home equity installment loan that has a fixed thirty year term. It seems that the closing costs are much less and there are no requirements for loan continuty or seasoning. This will be a first position loan and I beleive I should be able to get enough cash out to get my credit score back up in the mid 700’s. At this point, I will try to refinance the home equity loan in order to get a better rate. Any thoughts or suggestions?