Can Anyone Tell Me If This Will Work
Okay, I think I have a deal, this is how I want to structure it:
Seller is going to deed me her house. However, there is a balloon note that is coming due this May.
After getting the deed, I am going to "refinance" or get a new note, that will pay off her exisitng note and allow me to get some cash out.
As long as the lender has no seasoning issues (they don't), this should be fine, correct?
I just have to make sure that the deed is recorded ASAP, so that when the lender looks, I'm on title for the property.
Thanks,
As long as the lender doesn't have any title seasoning issues, then you should be ok. There are at least 2 seasoning issues that lenders look for to qualify a person. Those are title seasoning and seasoning on funds.
Title seasoning is based on the amount of time you hold title to the property. Lenders usually look for at least 12 months before allowing a refinance.
Funds seasoning is how long you had a certain amount of cash to pay for the downpayment, closing costs, etc. The reason for seasoning of funds is so the lender can track where the money is coming from to pay for the total expenses (downpayment, closing costs, etc.). Layman terms, they want to make sure it's not illegal drug money being used to pay for a house.
Just make sure you distinguish the 2 when looking for a lender.
Tanya[ Edited by tanya1215 on Date 02/21/2004 ]
Quote:After getting the deed, I am going to "refinance" or get a new note, that will pay off her exisitng note and allow me to get some cash out.It is the "get some cash out" part that will bring title seasoning issues into play.
If you just do a "rate and term" refinance to pay off the upcoming balloon without taking any additional cash out, then you should be able to submit your loan application with only one day on recorded title. If you want a national lender to do this for you, try Countrywide Home Loans.
After you have had your title and your own loan seasoned for awhile, refinance again if you still want cash out.