Tuesday, July 12, 2011

Cash-Out Refinances Less than 6 months

Fannie Mae unveiled an exception to their cash-out refinance seasoning requirements. Up until now, they have required the owners to have owned the home for 6 months prior to completing a cash-out refinance. For example, f the borrower paid 100% cash for the home, they would have needed to wait at least 6 months before considering a refinance to take cash out. With Fannie Mae releasing the information we now have an option for them so they don’t have to wait. I will give you a few bullet points to consider, but if you or a client has a need to do this, I would be happy to talk to them and see if they fit all the criteria.

Main Points:

• Loan Amount can’t be more than original purchase price

• Purchase must have been an Arms Length Transaction

• No Mortgage financing was used to obtain the property and that must be confirmed by HUD-1 from cash purchase

• Must document the source of funds used to purchase the property (bank statements, personal loan documents, etc.)

Call me with any questions.

1 comment:

loanmodifications said...

A loan modification program that offers a principal reduction so that the mortgage balance more accurately reflects the homes true market value is one way to entice borrowers to keep making loan payments and avoid foreclosure.

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