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100% LTV refinance shortly after purchase?

I'm purchasing a home with 45% down, and would like to pull my down payment money out as soon as possible. Does anyone do 100% LTV refinancing shortly after purchase? More details and explanation: the reason for the large down is that the house would not pass appraisal conditions (no water) due to it being a foreclosure and the owning bank will not allow work done to the property. Therefor, a large down payment and a Portfolio Loan was necessary to secure purchase of the home. The home will have water running to the house days after closing, and it will be owner occupied. I would to take the down payment money back out of the home shortly after purchase. Purchase price, $230K, down payment $80K, appraised $365K, my credit score 800, wife's 815. Getting all, or nearly all of the down payment money back out of the house within 6 months is imperative. by mybyna_346_944 from Longmont, Colorado. Mar 8th 2012 Reply


Brian Neuwirth (Bneuwirth)
#49 ranked lender in Colorado - 28 contributions

There are loans that can be done on this home in its current condition. A typical product most lenders would offer is a 203(ks) home. I short this is a rehab/remodel loan that allows for up to $30,000.00 to be borrower in excess of the the purchase price. There are certain limitation but typically these are combined loan to vlaue and not the condition of the property. This product is avaible even if the home does not meet MPR (minimum property requirements)To answer your question, cash out transactions are limited to 80-85% loan to value unless you are wanting a non-conventional loan. These loans would have a higher rate and I personally would not recommend them. In shortafter you purchase you will need to sit on the loan for 4-6 months depending on the lender before you could refinance and then you would only recoop. a small percentage of your down payment. With the new closing costs for the refinance, I wouldn't recommend doing the loan.If you are going to occupy this home as a primary residence, please consider a FHA 203(ks). This is your best bet and the pricing is in line with most FHA products. f you have any other questions feel free to contact me and have a nice day. Brian.neuwirth@tlclender.com

Mar 8th 2012
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David Widlund (david_283_200)
#44 ranked lender in Colorado - 7 contributions

I agree with the others. No cash out past 85%. You may be able to get a 2nd mortgage which will give you back up to 90% of the home's value or purchase price, whichever is lower. Is the property owned by Fannie Mae or Freddie Mac? They each have conventional solutions for buying the property as is and in some cases even lending fix-up money. Otherwise, check with your lender to see if this could be purchased using a 203k FHA rehabilitation loan. That could allow you to borrow up to 96.5% of the home's post-fixing value. I don't see you getting 100% cash out after purchasing.Good luck!

Mar 8th 2012
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Interesting, I got off the phone with Key Bank and they said they'd do 100% LTV HELOC shortly after closing. I hope they aren't pulling my chain. I was not able to find anyone willing to do a 203k FHA. I've heard people talk about them, but no one willing to do one. Oh, and sorry for my typo, it will be a 35% down, not 45%.

Mar 8th 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

FHA cash out is 85%, and Conventional can go as high as 90% with some lenders... There are also options such as a first position Home Equity Line of Credit, however nowadays; they typically won't go more than 90% either... WilliamAcres.com

Mar 8th 2012
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Brian Neuwirth (Bneuwirth)
#49 ranked lender in Colorado - 28 contributions

I read your post. Keep in mind a HELOC is a "Home Equity Line of Credit" This is similiar to a credit card and will lower your fico if you are carring a high balance in it. There are numerous 203 k lenders in the market and I would be happy to direct you to one if you're interested. Have a great day.

Mar 8th 2012
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

Whoa. Are you saying that the ONLY thing wrong with the house is that the water has not been turned on and the selling bank is not willing to turn it on? I have done hundreds of loans where the property is bank owned and they ALWAYS allow the prospective buyer to turn on ALL of the utilities for an inspection. Not once have we been told no. Are you sure your agent has asked for permission? If he has, and forcefully, and they still say no, then I'd bet there are other more serious issues that don't want you to discover. Now regarding the second issue of getting all of your money back within 6 months of purchase... It isn't going to happen. If this is going to be your primary residence, the absolute minimum down payment you could get away with is 3%, and then the mortgage insurance premiums would be very expensive. On a cash-out basis, you are going to be capped at 85% LTV. My advice would be to fight to get the water on and close with purchase money financing. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Mar 8th 2012
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