Refinancing

[Tim Farrell]

I recently purchased a home for $85,000 in cash, put another $15,000 into it and now it has a ARV of $139,000 based on area comps. I would like to get a mortgage on this home and cash out the majority of my equity so I can continue to purchase more homes. My mortgage guy states that I can only get 75% of the original purchased price and not the ARV? I have owned this property over 6 months and would like to get $100,000 of equity out of it.

Is what I am being told by my mortgage correct? Are there any other suggestions as to how to accomplish this cash out?

[Matt Devincenzo]

Yes and no.

What you're talking about is seasoning. It was a minimum of 12 months seasoning after purchase before you could do a cash out refi at a new appraised value. More recently there have been several people that have found cash out refi's using new appraisal values for 6 months seasoning. You will probably have to call around and look to find someone who will do it, but apparently it is beginning to happen.

What he means is he can't do it because of his underwriting guidelines, which were what everyone used until recently. Now things are loosening up and you can find someone who has different underwriting criteria.