Can anyone tell me on a refinance with less than 12 mos seasoning what value would a lender use for No Cash Out refi when calculating the LTV. Would it be the sales price (within the 12 mos) or the new appraisal-whichever is lower? I have a client that will be closing within the next three days that is already considering a refi because of her rate lock being at 6.0%. With rates going lower she wants to know what the requirements are for a refi very soon after she closes. She will close this deal as a 80%LTV CONV. Thanks!

Do you have a float down option?

Marie W.:

Can anyone tell me on a refinance with less than 12 mos seasoning what value would a lender use for No Cash Out refi when calculating the LTV. Would it be the sales price (within the 12 mos) or the new appraisal-whichever is lower? I have a client that will be closing within the next three days that is already considering a refi because of her rate lock being at 6.0%. With rates going lower she wants to know what the requirements are for a refi very soon after she closes. She will close this deal as a 80%LTV CONV. Thanks!

Is she currently using you for the current loan?  Be careful as most Lenders will charge you for an early payoff.  From a borrowers perspective, as long as there is no pre-payment penalty, they can chase the rate Dragon!  Of course this will change as Lenders are starting to require NTB's to be filled out and soon an .125 or .25% decrease in rate may not make the cut.

 

 

No, no float down option.

Yes, she is using me for the current loan. But the Realtor isn't happy that I cannot lower her rate for her before closing. The Realtor is telling me that she is going to counsel the borrower that she should refi soon after closing to get a lower rate. My colleage told me that she thought that there was  6 month seasoning requirement by Fannie. It seems that is the case for a cash out but for a non cash out it might not be.

So I was wondering if anybody knew what value would be used for qualifying the LTV on a recently purchased home-sales price or appraised value to find out if she would have to pay the closing costs in cash to maintain her 80% LTV.

 

 

Why can't you take to another lender if locked one place and now the rates have dropped?

Do you work for a bank that does not allow that?

On the broker side, If the loan has not closed, you can switch lenders.

That is a lender specific question.  Most lenders will do the whatever is less scenario.  If you refinance right away, what are you worried about on getting a lower value on the appraisal?  It should be the same as the purchase price.  If you are hoping to get higher than the purchase price for your appraisal, you will probably have to wait 6 months.  This is a lender specific question.  They all have different overlays with the GSE's.

You definitely don't want to get hit for recapture of YSP. I believe it is 90 days to avoid recapture. With regards to seasoning, most major lenders require at least 90 days to use the appraised value over the sales price. This question gets brought up all the time in my office and today I was informed that US Bank and Nationwide will still allow this after one day using the appraised value.

 

Mike what Lender(s) allow 90 days?

Bob, we have a list at the office I can post on Monday but off the top of my head I believe it includes GMAC, Citi 5th/3rd, Wells Fargo

I know Wells rocks & rolls, Citi is at least 4 months.  Thanks

Your welcome. Check Citi Broker not Correspondent.