Using LOC to buy and cash-out refinance after seasoning?

[Account Closed]

If I were to obtain a personal line of credit to combine with my own capital in purchasing/rehabbing a property, how would this affect me when it comes time to cash-out refinance?

[Andrew Postell]

@Account Closed if you don't want to wait the 6 months you can follow what I wrote in that article.  Also, if you want a better rate the article strategy does help.  But when you are using a business line of credit, if you deposit the funds into your business account, it won't matter.  Sourcing and seasoning deposits into a business account is not needed for Fannie/Freddie loans (assuming that's the loan type you will use).  They would require explanation in your personal accounts.  And unsecured funds into your personal account could earn a decline on your loan.  Where it get's confusing is that banks have these things called "overlays".  Overlays are extra rules that lenders put on top of Fannie/Freddie (and others) guidelines.  So if you hear "we have a minimum credit score requirement of X"...that is an overlay.  There is no minimum credit score requirement to Fannie/Freddie.  And the same could be for the business deposits.  Fannie/Freddie do not require business deposits to be sourced.  So deposit them in there so it won't affect your loan.

*WHEW*  Lot's to know.  I'm in Texas too so feel free to reach out if you would like.  Thanks!