Seasoning
Okay-- can someone explain the impact of "seasoning" requirements on quick turnaround, or "flipping" investment strategies?
If a buyer cannot obtain a mortgage on a property that has been owned by seller for less than a year-- how are peolpe rehabbing and reselling in 4 to 6 months?
Can someone help this newbie out? Clearly I am missing something. Thanks all.
This is a valid hurdle and can be overcome with a short term lease option. Lenders for the buyer are placing rehabbers in a tight spot with the title seasoning requirements.
Techniques are defiantly welcomed.
Eric & Rosa
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Hi jmax,
It has been my experience that the seasoning issue depends on the borrowers credit. If your buyer has shaky credit and the mortgage broker has to use alternateive financing, it will come into play. If you buyer has good credit for convention financing, you shouldnt have a problem with this.
Before I accepet a contract, I have the buyer contact my mortgage broker, my broker pulls credit on them to see if seasoning will be an issue.
Best of Success!
BAMZ
Thanks clasimg and BAMZ.
clasimg-- I have a good private money source but they don't want to deal with rental or lease option deals. They want to get in and out in 4 to 6 mos.
BAMZ-- I heard that if a buyer's credit was shaky they would probably be using alternative or sub prime lenders and thus, (because of the higher interest/ less favorable terms) the lenders seasoning policy would be more flexible/favorable -less picky? This goes counter to your experience?
Also-- someone here mentioned sources for "FHA clone loans" with basically the same deal but no seasoning. Is this for real and does anybody know Mortgage brokers in Georgia familiar with this?
Thanks again for all the help and input guys.
BAMZ-- I heard that if a buyer's credit was shaky they would probably be using alternative or sub prime lenders and thus, (because of the higher interest/ less favorable terms) the lenders seasoning policy would be more flexible/favorable -less picky? This goes counter to your experience?
A - Yes, they do charge higher interest rates and less flexiable terms, because there is a greater risk to them already. This will inturn make them more alert and more questionable as to why a property has gone up in value so much in such a short period of time. Does that make sense?
BAMZ
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