All Forum Posts by: Ben Carmona

FHA wouldnt be used by you as an investor. Your buyers might need FHA financing and this where the 90 days seasoning will come into affect. You'll need to be on title 90 days before selling. Some conventional lenders have picked up on seller seasoning too.

Cash out seasoning is 6 months if you plan to get a conventional mortgage. You can own up to 4 financed properties. So if you used your own funds to buy the property then you'd need to wait 6 months if you wanted to get that cash back. If you used a private or hard money lender to acquire(that secures a 1st lien) then you could pay back that through a rate/term refi and there is no seasoning. However, if you want any cash out beyond paying off the 1st lien then you'd have to wait.

The cash out restriction is only for conventional loans though. There are commercial and portfolio loans that dont have seasoning requirements and dont have a restriction on how many properties you own. These loans will not be 30yr fixed terms though, more like 20yr amort with a 3-5yr balloon.

I'm certain there are plenty of options for this scenario. You need to be thinking commercial or portfolio loans.

I've been saying this for many months now that small local banks and portfolio lenders can do no seasoning refinances and have no restrictions to how many properties are owned.

Investors either just need to pick up the yellow pages and call or have a consultant find the sources for them.

Stated income is the tricky part.

There are sources for the combine need of: stated income, no seasoning, and no restrictions for # of properties but the cost can be a bit eye opening.

Is this an investment property?

http://www.mtgprofessor.com/A%20-%20Refinance/why_is_this_refinance_cash-out.htm

Hi Tom,

There is less risk to a lender if you are only paying off an existing listing versus taking out additional cash.

A high note would not justify a higher value. The appraisal and any work done would help substaniate the value.

My thought here is that if you actually have a friend, family member, or private investor give you funds which turn into a lien..great. But you can just use this as a tool to work your away around the lender.

Originally posted by Susan Lassiter Lyons:

These small banks and credit unions don't work with brokers so brokers are not your best bet here.

I must disagree with this point as did a fellow colleague elsewhere. Brokers who research local banks nationwide are still a great resource for investors. Over the last 12 months I've spent countless hours researching banks nationwide and have developed quite a few relationships which can be passed along to clients.

Originally posted by Susan Lassiter Lyons:

The biggest mistake you can make right now is paying cash for props if you want that cash back within 6 mos.

Even after 6 mos you will be limited to the amount of cash you can get AND the LTV will be a lot lower than you are expecting often leaving 30-40% of your cash locked in that house.

Always have a note and deed of trust on a prop when you purchase - not one of your companies but maybe a friend or colleague - so that when you are refinancing you are paying off debt.

Susan,

Feel like we've been here before. Just wanted to express my thoughts that your advice is not sound for every scenario. You say paying cash is the biggest mistake. While I agree that under certain circumstances this may be true, paying cash for a property can have major advantages in time sensative deals. Not too mention strengthening potential offers. Of course permanent financing needs to be accessible.

What I really hold issue to though is last part of your post. It appears that you're advocating borderline fraud by having investors create a fictitous lien to circumvent the this being cash out instead of a rate/term refinance. Maybe you should clarify this so readers know they really need to obtain funds from that friend or colleague. They cant just claim to have had a lien recorded.

There are very few stated income loans left if that is what you are searching for. Lenders still allowing this will have either higher rates or higher costs or possibly both. For full doc I would suggest either using local banks where the property is located or finding a broker do refer you to one of these. Brokers will also know of some portfolio lenders that may still do no seasoning refinances.

How many properties do you own? That's another main factor no that the # of financed properties has been cut back to 4.

My recommendation is to get in touch with a mortgage professional that specializes in investment loans like this.

I have 1 lender left still underwriting to Fannie Mae's old guidelines. This will probably be changing by next week. Locked 3 in yesterday. All were over 4 financed properties with less than 6 months seasoning. My understanding is that lenders have until 12/1/08 to sell these off to Fannie. Hopefuly with them locked in they should be grandfathered in when the changes hit.

Of course there's always local banks as well. What city are you in?

There are local banks in OH that do these too.