Lenders with No Seasoning Requirements
Most lenders and mortgage programs have seasoning requirements that could make it difficult to refinance.
If you are trying to refinance or even purchase a home, there are lenders who have no seasoning requirements that do not require the usual waiting period. We have over two decades of experience in offering this type of financing for thousands of homeowners and investors.
Mortgage seasoning could be related to refinancing after a purchase, bankruptcy seasoning, and also down payment seasoning. We will discuss all of these below and which lenders may offer a solution.
Refinancing with No Seasoning Requirements
Most mortgage programs have seasoning requirements for refinancing. This means you are unable to refinance to lower the rate, or cash out until after a specified amount of time has elapsed after your purchase date.
Rate and Term Refinance Seasoning Requirements
For FHA, VA and USDA loans, you will need to wait 6 months before refinancing without cashing out. For Conventional loans, you can refinance for rate and term immediately after purchasing the home.
If you are refinancing after 6 months, the lender will likely use the original purchase price as the value for the refinance and not the current appraised value.
If you want to use the current appraised value for the refinance, you will need to wait 12 months.
Cash Out Refinance Seasoning Requirements
For cash out refinances, you will need to wait 12 months after the initial purchase if you are going to use an FHA, VA, Conventional, or USDA loan. For investment properties, the seasoning can be significantly reduced.
Seasoning Requirements for Investment Properties
Investment lending has different rules when it comes to seasoning requirements for refinances. In some instances, it is understood that you may purchase a property to rehab, then refinance into a long term loan for rental purposes.
If you did not rehabilitate the property, your lender may use the original purchase price if purchased less than one year ago.
When buying a home to rehab, we recommend coming to use to discuss both the rehab loan and the cash out refinance before you make the purchase. We can arrange for the funds for the rehab and then also the refinance with no seasoning if the loan is being kept with the same lenders.
One of the most popular loans for investment properties is the DSCR loan. With this type of mortgage borrowers evaluated based upon the cash flow after weighing the rent against the debt (mortgage, insurance and taxes). Read more about DSCR loans.
Complete this short quote form to see if you can refinance with no seasoning requirements.
Down Payment Seasoning
When purchasing a home, most mortgage programs require a down payment with VA and USDA as the exceptions.
Underwriters will analyze your bank statements to determine whether you have enough funds to purchase the home. This includes the down payment plus closing costs and any reserve requirements.
Any large deposits that are unusual may need to be seasoned for at least two months. A written explanation could waive the seasoning requirement for that deposit. A good loan officer can help guide you here so your approval or purchase does not get derailed due to down payment seasoning.
Bankruptcy Seasoning Requirements
Most traditional mortgages have bankruptcy seasoning requirements where you must wait a specified number of years before securing a mortgage approval. You could wait anywhere from 2-4 years before you can purchase or refinance your home.
There are some subprime lenders who will allow you to purchase or refinance a home just one day after a chapter 7 discharge. If you are going through a chapter 13 bankruptcy, you can get an FHA loan after making 12 on time bankruptcy payments.
Lenders with No Seasoning Requirements
If you are looking for lenders who have no seasoning requirements at all, your options will be limited and relegated to investment property financing.
These are some options for you to choose from for primary residences but with the rapidly changing guidelines, it is best to contact us here and we will help guide you to the option that would fit you the best.
We recommend speaking to a lender to create a plan before you make your initial purchase. We can help align you with the purchase and the eventual refinance to help with a smooth transition without a seasoning requirement.
Lenders Eligibility Criteria Without Seasoning
Lenders who are willing to waive the seasoning requirements will have a few basic requirements that will be standard for each. The first requirement is for there to be no late payments on your existing mortgage. If you are late with a mortgage that you only had for just a few months, that is a major red flag for underwriting.
Next, they will take your credit scores into account not only to determine your interest rate but also the maximum loan to value ratio or whether they are able to offer a refinance at all.
Finally, the reason for the seasoning waiver. For example, if you are looking to waive the seasoning to cash out, that will be different than if you are looking for a seasoning waiver after a recent bankruptcy discharge.
When the loan officer takes your application, they will initially review and will compare against their qualification and eligibility requirements for each loan program. There may be restrictions for certain mortgage programs but the loan officer will provide you with any and all options that may be available to you.
Next, you will find out what type of documentation is required, and what the interest rate and closing costs will be for each type of mortgage.
Frequently Asked Questions
Do all lenders have seasoning requirements?
All lenders will have some seasoning requirements depending upon the loan type. However, some lenders require less seasoning than most.
Can I get a loan for a property with recent renovations?
You can get a loan for a property with recent renovations and use the new value of the property when refinancing.
How can I find lenders with no seasoning requirements?
Lenders without seasoning requirements are not easy to find, but we have a whole network of lenders who can potentially help you. Start by completing this short loan scenario form and we will call to discuss.
What types of properties are eligible for loans without seasoning requirements?
Virtually all typed of properties are eligible including 1-4 unit properties, mobile homes, large multi family, office, and retail.
Do lenders with no seasoning requirements charge higher interest rates?
The rate will be determined by the type of mortgage, your credit scores, and loan to value ratio. The seasoning will likely not impact the rate.
How long does the renovation or improvement period need to be before it qualifies for no seasoning requirement loans?
If you have a fix and flip loan, you can refinance without a waiting period.
What documentation is required when applying for a loan with lenders that don’t have seasoning requirements?
This depends upon the type of loan you are applying for. A conventional, FHA, VA and USDA loan require all of the traditional income and asset documentation. However, alternative documentation loans require much less but the interest rate may be higher.
