Seasoning
Could someone explain seasoning to me I have checked the archives but I am still a little confused. Does this law vary from state to state? How would this affect me if I was to purchase a property at a tax sale.
-Dave-
As I understand it, seasoning is important by mortgage lenders. They want to make sure that the person they are lending to have paid on the mortgage for a specific period of time. This is especially true for individuals who have never had a mortgage. They want to make sure that you haven't gotten over your head.
You may be refering to seasoning as in FHA etc. (flipping properties.) If this is the case, you can email me (check my profile) and I will email you a document on it...
Hope this helps
Derek
Dave,
Are you referring to title seasoning? With title seasoning, many lenders are now having a requirement, in which you have to hold title for at least 1 year. If you purchase a property and the buyer's lender has a seasoning, then unless you have owned the property for 1 year you cannot sell it to them. You will have to find a buyer with a non-seasoned loan.
Tanya
Hi Tanya I dont know what seasoning I'm talking about. I am new and my plan is to start investing with tax sales. Would seasoning effect me at all? If I bid at an auction and I have to wait out the redemption period would I then have to wait more time before I can sell the property or am I totally off track.
Lenders do give morgages on property owned less that a year( title seasoning)
The work by policy they do or they don't.
Morgage brokers can find the correct lender to get you out of that house quickly. I'm allways forthcoming with lengh of ownership as to aviod closing day problems.
I think that may be what you are asking
Seasoning simply refers to the amount of time that something's been held.
If you bought a property a year ago, then the title has 1 year of seasoning.
If you've been paying on a mortgage for 6 months, it has 6 months of seasoning.
In general anything that is unseasoned or not seasoned for long is considered a higher risk.
Thanks for the replies, so seasoning is not a law with a specific time frame but a red flag that might be brought up, however if I work with a experienced mortgage broker it wont be that big of an issue and can be worked through. Correct?
Thanks -Dave-
ps. why have I heard people say no more flipping?
I noticed on other thing you said....
"Does this law vary from state to state?"
Seasoning is not a law, but rather a policy that varies from lender to lender, bank to bank, program to program, etc.
Why do you need 1 year of seasoning to get a second mortgage? This seems stupid. People will foreclose whether you've owned it for 1 day or 10 years if circumstances change. I don't get it.