Non-seasoning Cash Out Refinance
We are taking over payments on a property.
We can either assume the non-assumable mortgage, or possible get the bank to let us take over payments anyway. Our son will be moving there as his first home. What is the best way to structure the deal so we can immediately do a non-seasoning cash out refinance?
Thanks, Tedi May
You could buy the property Subject-To and record the deed. Once you do this you are the legal owner of the property and you can refinance. If you take it subject to, and I would openly inform the bank on what you are doing! Just do it!
I dont understand what you mean by cash-out. Will there be a lot of equity in the property when you buy it?
BAMZ
Thanks for your reply.
I've done the subject to and recorded deed scenario several times before, , but now in Georgia, lenders are not letting a person who holds title to a property do a refinance unless their name is also on the mortgage- they are saying a person can't refinance a mortgage unless their name is on the mortgage, not just on the title!
Yes, the property will have around 20K equity, so a little cash out wuld be nice, plus the interest rate could be lowered from 85 to around 4% on a 5/1 Adjustable rate mortgage.
Can you perhaps get a new lender, or perhaps a mortgage broker who can outsource you a refi-loan without this restriction?
BAMZ
Seasoning of title and mortgages has become very strict for most lenders. Try opening a 1st and a second(HELOC). The lender may let you free up the equity based on the appraised value vs. sell price. Also, look into interest-only loans as they have lower monthly paymenst and may benefit your son more.