What should I do?

I just purchased a new home for myself and family with 1 mortgage of 163k. The house was appraised at 216k when I bought it last month. This purchase used up all my funds, but I do have equity, (50k). I have 600 credit score and got this loan as “Stated income”
I need some of this equity for an investment property…(holding costs, fix-up). Should I take a home equity line of credit or a second mortgage loan? Should I do a re-fi and pay the prepayment penalty? The investment will cost me about 10k and return about 20k…I was told I can only get 15k out of my equity…Should I find a new mortgage broker?

Howdy Kevwar:

Some sort of 2nd would be preferred to a refinance with all the closing costs associated and especially the prepayment costs. Have you tried getting quotes from other equity lenders. You must not be in Texas as we can only borrow 80% of the value of the house on a cash out equity loan on a homestead. I hope this is a solid deal and you are not risking the loss of your home.

I would be suprised if you were able to get even the $15k out. Not many lenders will do a refinance loan with less than 6 months purchase seasoning and if they do the ltv’s are not more than 70-80% from what ive seen.

I am not sure where you are located and that can play a key role in acquiring your funds. I would have to agree with tedjr that some sort of second would probably be a better remedy for your needs.
This would avoid the paying higher closing costs again and the potential of a prepayment penalty, which I am sure that you probably have.

There are lenders that do not require any purchase seasoning and more that require only 6 months. These are “B-C” Lenders and their rates will be dramatically higher than those of conforming lenders.

I agree with everyone else, get a 2ndor even a HELOC to avoid paying the prepay, which will eat up a lot of your equity.

I need a re-fi on my house that I bought 1 month and a half ago, but most lenders need 6 months seasoning. I have about 50k in equity…Anybody know of a lender that doesn’t need 6 months? I am in Massachusetts, the state with the weird laws…
I would appreciate some help!!

This is precisely why I recommend using the high LTV Investor loans to begin with. You can use No Income Verification loans that offer 100% on investment properties and keep your money in the bank for re-hab or further purchases. These loans will have higher interest rates, but 9% per annum is a drop in the bucket compared to what you’ll lose by not being able to make your next investment!