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Cash out refi prevents buying new home? Help


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I just completed a cash-out refi on my primary residence and wanted to use that cash towards buys a new primary residence. I want to convert the current existing primary residence to an income property. I found out I am now locked from getting another primary residence mortgage because the cash out refi stipulates I am living their for one year. Am I understanding anything wrong, is there any way out or options for me? Anything creative?

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I mean if the mortgage stipulated a residency requirement for 1 year you are kinda stuck at this point (unless you re-fi it as an investment property).  You could always buy the second house as an investment property and then re-fi that after the residency requirement has passed.

 

Hindsight now obviously, but lesson learned to careful read T&Cs of contracts to make sure you are clear of the requirements/stipulations.

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On 4/2/2021 at 12:21 AM, lobakgoh said:

I just completed a cash-out refi on my primary residence and wanted to use that cash towards buys a new primary residence. I want to convert the current existing primary residence to an income property. I found out I am now locked from getting another primary residence mortgage because the cash out refi stipulates I am living their for one year. Am I understanding anything wrong, is there any way out or options for me? Anything creative?

Is your mortgage not conventional? I am planning to build a new house which will be a primary residence with the cash out I took couple weeks back and will be closing it in next 6 months. Can I know how did you get into agreement for one year? Any help from you is really appreciated 

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On 4/2/2021 at 12:21 AM, lobakgoh said:

I found out I am now locked from getting another primary residence mortgage because the cash out refi stipulates I am living their for one year.

 

What is the actual language in the note (verbatim, not paraphrased)?  IIRC, most notes have some exceptions to the residency requirement (change of job over X miles away, for example).

 

I'm not suggesting stretching the truth, or lying/committing mortgage fraud, but your options should be spelled out.  Right now the reactions you are getting are based on general impressions.  What matters is what you signed.

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I'm with @CV91915 ... you need to spell out all associated restrictions and related penalties.   To be honest, I have a general impression that most mortgages specify that you'll be the primary resident in the home during the mortgage duration.

 

In any case, I'd guess that your most feasible strategy would be simply to re-fi into a mortgage without the restriction.

 

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