Pay Cash, Refurbish Then Get A Mortg How Easy Or Difficult
Ok a question was discussed over in the refurb forum.
How easy would it be if you bought a house cash, fixed it for cash and then applied for a mortg or HELOC. How easy or difficult would this be and what loan to value could you expect to get all things considered.
I thought I would ask over here where it might be seen by mortg brokers.
Ok so say you pay cash for a house then you want to get a mortg or HELOC how difficult or easy is this.
Logically to me it seems there would be no seasoning issue since there was no mortg but I would like to know for sure
The seasoning problem has nothing to do with the mortgage.
It has to do with how long your name has been on the title. That is why it is called title seasoning.
So paying cash does not help the situation.
Lacash,
Thank you for the answer.
So you are saying if a person pays cash for a house they could run into problems if they tried to get a HELOC on the property in a month or so after buying?
I agree with lacashman, the title seasoning issue may be the problem. Most lenders like to see the owner to hold title for at least a year, but that doesn't mean there aren't lenders who won't lend with a 3 month seasoning. It would be more difficult for a broker to find a loan with a 3-month title seasoning than a 12 month title seasoning.
Tanya
They seasoning issues are ONLY A PROBLEM for some borrowers. I have paid cash for every house I own, and have refinanced them within two months from closing on the cash deal. Seasoning becomesan issue when you don't qualify for a conforming loan, or if you have a bad track record on other mortgages, or if you have a lot of vacant properties. SEASONING has become a dirty word in this business. You can actually buy a house today and refinance it on Monday. You must have a knowledgeable broker or banker dealing with this. I have heard from many people that this is an issue, It is not. I see you are from Fl. and a know for a fact that there arelenders there that don't require seasoning. See my pofile for more information. LORI
I would say it depends on your credit score, relation with the bank you want to borrow from, your overall game plan and the next move. it also depends on how deep is your cash suck... I for example never had a problem with seasoning because of my superb relation with couple of banks that knows my payment record is 10+.
But back to subject, if you intend to fix and hold you may want to get an equity loan or line of credit and then refinance in a while with fix, ARM, HELOC, COFI COSI or LIBOR based mortgage.
One question thou Mr. Mike: Why would you want to buy for cash? Bad credit? In my opinion, you might have a better use of your cash while you use OPM; private or hard.
Assuming your credit and other info is in good order, Seasoning is not a huge issue. Worst case you will have to document aquisition and rehab costs (HUD1 and receipts) and they could base LTV on this. But as long as it is documented correctly and the reason makes sense, most companies have programs to fit. In fact all being equal, this would fall under fannie guidelines.
Quote:
On 2004-02-03 15:08, omega1 wrote:
One question thou Mr. Mike: Why would you want to buy for cash? Bad credit? In my opinion, you might have a better use of your cash while you use OPM; private or hard.
Cause when you walk in a house you have already researched and you offer the seller a closing in 2 days with all cash it is ASTONISHING how cheap you can get a house.
I didn't believe it myself until I started doing it.