Cash out Refinance on free n clear property

[Amar Amar]

Hello,

I have purchased a townhome with cash, free n clear.  It’s a new construction from builder. I need to finance it now (to pay back the money I used for it). Is this also a cash out refinancing? Do I have to wait for the seasoning period of 6 months before I can refinance? I also heard in the BP forums about Fannie- Freddy increasing the seasoning requirements to 12 months. Bit worried about that. 

Some of the rates offered for the conventional refinancing are high ( over 6.5%) where as I am able to get at ~5% from a local credit union for an investment property purchase but they won't offer the same for this cash out refinancing. Any good leads for the lenders are appreciated. I'm in DMV(DC-MD-VA) area if it matters.

[Robin Simon]

Yes - the new Fannie guidelines are going into effect April 1 which will require 12 months seasoning period for cash-out refinances

https://capitalmarkets.fanniem...

A lot will depend on your financial situation/credit and the property but essentially you will have choices:

-Credit Union/Local Bank - hardest qualification, lowest rate but probably like you said big restrictions and long (12+ months) seasoning period for cash-out refis

-Conventional (Fannie) financing - now also 12 months

-Private Lenders ("DSCR Loans") rates will be a bit higher - 7/8s, BUT will allow cash-out refinances with pretty easy qualification and seasoning periods as low as 3 months only for some lenders