Get your ducks in a row for refi's

[Mike Hanneman]

Don't know how I missed this but I just want to make sure others don't have the same thing happen to them.

I got a good deal on a home in mid-town Coeur d'Alene, Idaho, which is becoming really hard to find. I got it under contract with minimal negoiations. I used my usual hard $$$ lady so I could do a 20 day close (which is how I got the deal, they needed out fast) and I was able to finsh my rehab and get it rented out under my time frame and under budget. Where's the problem at right guys? 

Well enter the refi! 

I checked before my contingency peroid ended, as I always do, to make sure that my lender can refi me out of the hard money loan. She said of course and I didn't give it another thought until it came time to refi out. The appraisal came back within $7K from my ARV estimate and I thought I was set.

Well, a week before I'm expected to sign, I get a call from my lender and was told they couldn't do the refi without me bringing cash to close... I was taken back and said NO!  Turns out about a year ago a guidline was changed in the Freddie/Frannie regs that doesn't allow "No-cash out refis" unless one has been on title for 6 months (seasoning!!!!). This was news to me as I have done this before with no issue and this is just now showing up. Turns out they can do refi's but they will use which ever is lower between the original loan and new appraised value. 

Long story short... I was able to get my refi done but had to have lender pull strings, etc... 

So just make sure that your ducks in a row before you do this so you don't get any unwanted surprises.

[Brian Garrett]

Those lenders are incorrect. There is no seasoning for rate & term refinancing.