Posted by James Harris on August 05, 2005 at 12:14:02:
Al, I agree with Joe. If you have the money to pay cash, buy it. Then do a cash out refi to get your money back plus your profit.
use cash or the bank? - Posted by Al
Posted by Al on August 04, 2005 at 15:56:31:
I’m not sure what to do. A friend wants to get this house off of his hands (his dad passed away) and only wants $25,000. The house would appraise at $55,000 easy and it is in rentable condition.
I could use cash and pay the $25,000 (which is no problem) but what’s the easiest way to get the money back out and the extra $30,000 (25,000 minus 55,000)? Or should I just use a bank and cash out at the table, even though he might want to hurry and get rid of it. Time might be and issue or he may put it on the market. I’m stumpped on what route to go.
Even if I pay cash what should I do after I have the house to get the money out?
Please define “seasoning” - Posted by Tim
Posted by Tim on August 06, 2005 at 17:07:21:
This situation brings a question to my mind.
It would make sense in my mind for Al to pay cash, and refinance after he owns it to pull out the equity in cash. Would he be able to refinance it right away after the purchase, or would the lender want to have seen the new owner have tenants for a period of time before financing? Is this what is referred to as “seasoning”? If so, how long would a lender want the property to be seasoned?
The reason I asked is that I just bought a house for what turned out to be about 85% of its appraised value. My interest rate is 8.1%. I’d like to refinance once the LTV is 80% with a 30-yr fixed rate. How long might I need to wait so the house can be “seasoned”?
Thanks.