I’m getting ready to bid on a house at auction and I called my mortgage guy to get some preliminary info. He said to get a Fannie Mae or FreddieMac loan I’d have to own the home for 6 months. To get a…I think it was principal loan (was less time, he said 45 days) but is this going to be the case if I can’t get “clear title” until 120 days after the IRS redemption period? Also, I guess it’s not really a loan since the property is owned free and clear so you can only pull money out of the house and I’m told don’t count on more than 60% of the purchase price at auction. Is this the case?
Are you planning on living in the home yourself, or are you purchasing it as an investment property? If it is an investment located in southern CA, we might be able to help you out with some short term debt - 6 mos. - 12 mos. term.
Feel free to contact me if you have any questions:
We have refinanced 3 properties that were purhcased at auction in 2009. 2 are rentals tha 1 is my son’s residence. On all 3 houses the lenders required a minimum of 6 months seasoning. Then they would only loan 75% on the rentals and 80% on the residence of the lesser amount of the price paid at auction or the appraisal.
I understand that you can get a loan based on the market value after one year.
Every lender will have slightly different underwriting guidelines. You would want to talk to a mortgage broker. Based on the current underwriting guidelines of most lenders you are not going to find any that will lend over 75% of the current market value on a non-owner Occ or over 80% on an owner-occ. Those LTV’s are further reduced if you are doing a cash out refi vs a rate and term. Gone are the days of 100% cash out refi. Your mortgage broker will be able to shop your loan scenario and tell you what they can do for you and what the rate and term would be.