How long after you buy a house can you refinance?

Asked by John Holmes, Romeoville, IL Tue Mar 30, 2010

We are buying a house in preforclosure and should get some built in equity. We have a credit card that we would like to rope into the loans so we would like to refinance. How long after purchase can we refinance?

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7
Mick Rothblo…, , Rosemont, IL
Wed Oct 17, 2012
John,

The general rule (and I emphisize general) is that in order to use the current value of the home on a refinance, you need to wait 12 months. There are exceptions to the rule especially if you are doing major rehab work to the home you are purchasing. Since you want to throw a credit card balance in it, You will need to wait the 12 months in order to take advantage of the immediate equity you might have.

Feel free to contact me if you have any questions.
0 votes
Jim Holder, Agent, Rolling Meadows, IL
Tue Apr 13, 2010
John,

If this home is not going to be your primary residence, a refinance could be a challenge.

You should check with a lender before you close on this to determine what amount of equity you need to refinance and whether your income and credit will get you the loan you'll likely need.

Initial funding with credit card advance money can be expensive!

Hopefully you had an end plan before you started this.
0 votes
Carl Henker, , 95928
Tue Mar 30, 2010
Built in equity is a nice and makes you feel good about the price you purchased your property at. But it is not bankable in today's lending environment. During the first year your value will be limited by/to your purchase price documented by your closing statement. Congratulations on a good value purchase.
0 votes
Bill Dafnis, Agent, Arlington Heights, IL
Tue Mar 30, 2010
If you are purchasing a bank owned property that shows extensive work needed, you may refinance after work is completed as long as documentation from a licensed contractor is provided within the year using appraised value. Cash out will be in question with each individual lender. They all seem to have their own rules, of late.
0 votes
Steve Smither, , Palatine, IL
Tue Mar 30, 2010
The responses below are almost 100% correct. We just had this scenario and one of our lenders advised us we could take the application of the client 6 months after the close of their purchase. Meaning that the closing would be approx 7 months after the purchase. I hope this helps. Feel free to conrtact me if you have other questions or need advice.

Sincerely,

Steve Smither
Senior Loan Originator
Ardain Mortgage Corp
847-963-1000 Office
847-942-5151 Cell
ssmither@ardain.com
http://www.ardain.com
http://www.stevesmither.com
Web Reference:  http://www.stevesmither.com
0 votes
Rick Scherer…, , Tampa, FL
Tue Mar 30, 2010
Different lenders have different "seasoning periods," as it can vary lender by lender. Seasoning requirements for the type of loan, FHA, VA, or Conventional will vary as well. The reason for re-finance, such as " cash out" could extend the seasoning period as well. Cut to the chase, depending on the type of loan and the reason for re fi could be anywhere from a minimum to 6 months up to 12 months.

Rick Scherer & Kevin Reder

Smith & Associates Real Estate
Tampa, FL 33629
813.892.7907
0 votes
Susan K Klatt, Agent, Barrington, IL
Tue Mar 30, 2010
Typically, you must wait for the loan to season, I recall 6 months, but check with your lender. The rules and guidelines have changed.
Web Reference:  http://www.susankklatt.com
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