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Investor Options for Buying Real Estate; Pay Cash and Refi; 75% LTV Refi

Because we get so many repeat questions from investors, we thought we would address investor options again.

Investors can pay cash for properties, and refinance immediately afterwards for up to 90 days. If they wait until after 90 days, they miss “the refi window,” and have to wait a full six months from close. There used to be a 6-month seasoning window (before a cash-out refi was allowed) no matter what. This is no longer the case.

Investor refinancing can only go to 75% loan-to-value.

Investors can garner purchase money financing up to 80% loan-to-value*, but if they want to refinance into a lower rate after the purchase they will need to buy their loan down to 75% loan-to-value (this comes up often).

*Fannie Mae offers investor financing up to 85% loan-to-value, but the interest rate and the PMI are so high that we never recommend it.

Finally, both Fannie and Freddie offer investors purchase money financing up to 80% loan-to-value if the loan amount is $417,000 or less. But, if loan amounts go over $417,000, Fannie’s maximum loan-to-value is 65%, but Freddie’s loan-to-value remains at 80%. Lenders, however, exact a strong rate premium for this Freddie Mac option.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646