In the last few years, mortgage lending guidelines have begun to loosen as the broader economy is stronger now that the recession has passed. The following refinance scenarios may seem quirky, but work well and are eligible for financing:
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1. Cash-out refinancing followed by cash-out refinancing just 6 months later
You heard that right you can do a cash-out refinance and then turn around and do another cash-out refinance just six months later.
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2. Cash-out refinancing after a previous rate-and- term refinance 6 months prior
If you did a payment reduction loan on your mortgage six months ago and are now looking to pull money out, you can do a cash-out refinance on a loan that was just refinanced as a rate-and-term refinance just six months earlier.
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3. A rate-and-term refinance on a previous loan that was a cash-out refinance
Previously, you were not able to do this under Fannie Mae or under Freddie Mac. A cash-out refinance loan would typically cost you a slightly higher interest rate and slightly higher fees, but you can turn around six months later and do a rate reduction loan.
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4. Refi with just 1 year of tax returns if you’re self-employed
You can now provide only one year of income tax returns with being self-employed, which is great if you have been in the same field for the last five years. The big benefit here is if you had one income year that was strong, but the previous year, for example, was terrible. In this case, the lender can automatically throw out the bad year so long as your most recent year of income tax returns is enough income to qualify.
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5. Conforming high-balance loans on jumbo mortgage products
Some lenders will still allow you to do a conforming high balance loan on a jumbo mortgage loan product to pay off a second mortgage. They’ll do this so long as there was no drawer on that second mortgage during the last 12 months and the loan was rate-and-term. The benefit is it allows for a higher loan-to-value ratio, a better interest rate and lower fees. Otherwise you are subject to a conforming loan under Fannie Mae and Freddie Mac, which classify that scenario as cash-out, subjecting you to worse loan terms.
This article originally appeared on SonomaCountyMortgages.com and was syndicated by MediaFeed.org.
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