Cash-out Refinance Help

I'm looking for a cash-out refinance to combine my first mortgage, an interest only line of credit, and pay off some credit card debt.  This would not put me upside down on my house, but would be more than 70% of the value.  My credit score is mid-700's.

However, my house was recently on the market (came off in November) and I'm having a hard time finding a lender who can offer me a cash-out refinance.  I've been told by 2 separate lenders that it's a Fannie rule that my home has to be off the market for 6 months.  I have NO INTENTIONS of putting my house back on the market once it's refinanced and I've paid off my cc debt.  I'd just like to continue living in my house and can have a better monthly cash outlay by refinancing and consolidating some of that debt.  I have NO intentions of selling, moving, or not repaying my loan in the foreseeable future.  I have been current on every payment since I bought my home 5 years ago.

Is this indeed a Fannie rule or are there lenders out there that will work with me?

Thanks to all for your advice.  It's greatly appreciated.

Steve,

It is a Fannie Rule, but Fannie rules only apply to banks/lenders who securitize loans so they can sell them to Fannie Mae. If you want to find a lender that doesn't follow this rule than you need to check your local community bank or credit union because they will protfolio their loans(keep them and not sell them) which means they can make their own rules.

Thanks for the advice Mike.  It's greatly appreciated!  Fannie's rule is very frustrating.

Your welcome Steve. It's been fustrating on both ends..the consumer and the originator..Best of luck.

Mike's right, going outside the fannie/freddie lenders is your best bet.  The restrictions inside of 6 months is 70% for cash-out on fannie loans if the home was listed.  Depending where you are credit unions are the best way to go.  Most keep their loans and are charted to loan in communities.  In the mountain states Security Service Credit Union would do your loan.  And know that it pains us as brokers to ever send a client to the bank.

Good Luck

How much more than 70% is it? 

77%.  The appraisal came in at $345,000 and I'm looking for $266,000 (which would cover the closing costs).

You could consider doing 70% LTV now and then follow up with a Home Equity Loan or Line of Credit to cover the remaining $25,000 in a few months.  This would allow you to take advantage of the low rates today and still work with your current broker...

First of all, I want to say Thank You for all the advice and insight.  This is a wonderful place that helps a lot of people. 

Secondly, after checking with local credit unions, they all abide by Fannie/Freddie rules.  Therefore, I won't be able to do a cash out refinance until early May.

That being said, I have credit card debt of $25,000 and the $650 monthly payments are killing me.

Should I:
A) Add the $25,000 of credit card debt to an existing $10,000 interest only line of credit I already have (current rate on the $10,000 is 4.5%)?

B) Try and transfer the $25,000 to a new low interest credit card with low or no transfer fee's?

C) Some option I'm not thinking of?

By refinancing, all of this debt will be rolled into one mortgage, and assuming 30-year rates are 6% or less by May, my payments for my mortgage, $10,000 LOC and $25,000 credit card debt will be the same as my current mortgage payment - based on what I'm looking to borrow.

I would not transfer the debt to your HELOC nor open a new teaser rate credit card.  Both moves COULD lower your credit score and add another twist to your scenario.

To me it comes down to a decision between 3 options:

1) Refi to 70% now and get a great rate on that portion of your debt, then get new HELOC in May.  This way about 90% of your debt would be in a fixed rate mortgage around 5% and the remaining 10% of your debt could be put into a low rate HELOC.  This will provide you with a breather as you skip a mortgage payment as part of the refi process. ( I don't remember if you mentioned what rate you have on your current mortgage.)  This option provides you with the security of knowing the rate you can lock 90% of your debt into.

2) Wait until May to wrap 100% of your debt into a fixed rate 1st mortgage assuming that property values stay the same, your biggest risk is rates rising.

3) Stay tuned to the blog as you wait and if you see indicators that rates are rising dramatically, go back to option 1 and evaluate.

Hope that helps.  I would recommend option 1.

5.75% on my first.  I'm not overly concerned about property values declining since I'm on a lake.  Rates rising is, as you know, another story.

Taylor Bean and Whitaker can do the loan with it being off the market for 30 days.  This was true a few months back and not sure if that has changed.  Also, if the appraisal is much higher then last listed price they will cut the value some.

Just checked with my AE with Taylor Bean, they require a OO to be off market for 1 month and NOO to be off for 3 months.

Thanks for the info Victor.  I'm don't know what OO or NOO means though.  I see you're a Hokie.  I went to a football game in Blacksburg 2 years ago.  My gf's son is an '07 Grad.

Steve Leary:

I'm don't know what OO or NOO means though.

OO = Owner Occupied

NOO = Non-Owner Occupied

Thanks for the info Kent.  I have no clue what TBW's rep is though.

TBW is short for Taylor Bean and Whitaker...one of the major wholesale lenders in the market today. 

There are several other banks that are doing these loan scenarios with even 1 day off the market, but the rates aren't neccessarily the best you will find, but it can be done for maybe .5% higher than typical Fannie/Freddie Rates.  There are also some lenders that will do this as a CashOut if there is a good Letter of Explanation regarding the delisting of your home and the purpose of the Cash Out.  They are only being done on a case by case basis and most of the time it has to go through a Correspondent lending channel in order for the lender to consider funding these transactions.