Refinance after forbearance

[Steven A.]

My wife was briefly furloughed (as a doctor) and we were concerned about Rental income at a short-Term stay property (we own three single family homes, including our primary). Turns out we made a lot of money during the forbearance. The banks tagged the missed payments into the end of our loans (no questions asked). I just threw the money at some credit card debt we needed to knock out. Our credit scores are back above 700 (after paying down CCs). I am hoping to do a cash out refinance in one of our rental homes, and refinance the primary. Does anyone think this will be an issue? Thanks!

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Originally posted by @Steven A.:

My wife was briefly furloughed (as a doctor) and we were concerned about Rental income at a short-Term stay property (we own three single family homes, including our primary). Turns out we made a lot of money during the forbearance. The banks tagged the missed payments into the end of our loans (no questions asked). I just threw the money at some credit card debt we needed to knock out. Our credit scores are back above 700 (after paying down CCs). I am hoping to do a cash out refinance in one of our rental homes, and refinance the primary. Does anyone think this will be an issue? Thanks!

Banks lend on "the Ability and WILLINGNESS" to repay. Two separate issues: 1. You showed lack of willingness to pay. 2. The forbearance alone will likely be a major hurdle to any financing for three years.

If you explain to them that you had the money but didn't send it to them when due, they most likely simply deep 6 your application. Think of it this way, if your tenants said "we had the money but we spent it to reduce our credit card debt", would you feel better and warm and fuzzy about your tenants? In my case, I'd find better tenants.