How Can You Refinance

How Long After Buying A Property Before You Can Refinance

Nita's question: She wants to know how long she needs to wait to refinance or to take a mortgage out on a property that she purchased with cash.

Well, every bank would be different. Most common would be most banks require seasoning period, even if you paid cash for the property. So before they actually loan you any money on the property, it's extremely likely that they're going to want you to own the property for six months, so six months would be the most common seasoning period.

It's not that there aren't other banks that don't have other products out there, but if you're shopping around, you're probably looking for the best rate. And the best rate is probably going to come from one of the most atypical banks that has the six month seasoning. However, if you're getting a bank that has a product that requires less seasoning period, they might actually have a higher rate. They might just be trying to capitalize on the market by offering something kind of unique and a little bit different. And in doing so, they might actually be able to get away a little bit of a higher price.

My recommendation would be to shop for the best rate, although it depends. If it makes sense to you to be able to refinance it in three months and to get your cash back out because you have a killer deal and you don't mind paying an extra point or dealing with a bank that might not be as ideal, your first choice bank, then go ahead and do that. But otherwise, typically speaking, six month is the most common seasoning period. You buy it, even if you pay cash for it, you have to wait six months before you refinance it. Good luck!!!


Joe White

Joe White is a Philadelphia Property Manager and Real Estate Broker. He is the owner of Grow Property Management and has been involved in the management, sales and purchases of Philadelphia area rental investment properties since 2008. He is an author and works as a real estate investment consultant and construction manager.

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