Someone take a crack at this....
Question, if I pay cash for a property how soon can I get the property financed through a lender using the appraised value? If I buy a property that will appraise for 150k for a deep discount from a motivated seller and pay all cash can I get a loan against that property for 120k (80% LTV) or higher within a few weeks? Does it even matter what I pay for it? I know that if you get a loan on a property the selling price or appraised value, whichever is lower, is used as 100% LTV, but what if you pay cash? Will a lender see that and how much you paid for it? I'm dealing with the loan seasoning right now and I'd like to avoid it if I can in the future, this seems like a good way. Hope someone has an answer for this..
Andy
Give me a call. You've got my number.
How would paying cash and refinancing avoid the seasoning issues?
Tom
I guess that is my whole question, would there still be seasoning? If there is no loan then what is being seasoned? Will the lender want to see your name has been on title for a period of time? I always thought that seasoning had to do with loans. Anyone have a definite answer on this one?
Still the same. Either high interest rates from a company that doesn't care about seasoning, (ie statedloans.com), or low LTV for at least 6 months until SOME lenders decide to go by the appraised value instead of the purchase price. Most lenders require 1 year before they will use the appraised value.
There are exceptions to most rules in this business. Chances are that if you call enough brokers in your area, you will find what you are looking for.
hope this helps,
clear2close
[addsig]
I've done it before. Refinanced a cashout within 2 weeks after the first closing. Didn't pay a penny more in interest rate than the going investor rate. I think that credit will be a BIG issue for the lender (I've good real good credit).
Find a good investor friendly mortgage broker and tell them your plan. By doing a cashout refinance, you're making tax free money. Cashouts are considered loans, not income, and are not taxed.
I wouldn't refinance unless you are planning on holding a year are more. There are closing costs that eat up profit.
Roger
Hey rajwarrior,
Quick question... Was the LTV on the refinance based on the selling price or the appraised value? I think that's the focus of this member's post.
clear2close
[addsig]
In my experience a refinance is ALWAYS based on the appraised value (since there is no sale involved).
Sorry about that, should have included that in the first post.
Roger