On the subject of mortgage refinancing, it’s important to grasp the rules set by Fannie Mae and Freddie Mac. These two government-sponsored enterprises play an important function within the mortgage business, and MortgageDepot is proud to make the most of their underwriting pointers to make sure clean mortgage approvals.
Fannie Mae’s Necessities
Fannie Mae requires that every one house owners of the topic property personal it collectively for not less than 12 months, besides in circumstances of divorce, settlement, or different distinctive circumstances. Which means that for those who’re seeking to purchase out the curiosity of one other proprietor by way of a cash-out refinance, all house owners will need to have collectively owned the property for at least 12 months. Fannie Mae’s pointers don’t impose any particular occupancy or property kind limitations, offering flexibility for debtors.
Freddie Mac’s Necessities
Alternatively, Freddie Mac has barely completely different necessities for Particular Function Money-Out refinancing. To qualify, all house owners will need to have lived collectively within the topic property as their major residence for the final 12 months. This requirement ensures that the property is genuinely getting used as a major residence and never solely for funding functions.
No Money Again to the Remaining Borrower
Each Fannie Mae and Freddie Mac have a typical restriction – they don’t permit any money again to the remaining borrower. Which means that for those who’re shopping for out the curiosity of one other proprietor, you can’t obtain any money proceeds from the refinancing transaction. This restriction ensures that the refinancing is solely for the aim of fairness switch and never for private achieve.
Letter of Intent and Particular Phrases
Along with the above necessities, each Fannie Mae and Freddie Mac mandate a written letter of intent and particular phrases concerning the money to the bought-out celebration. This ensures transparency and readability within the refinancing course of, defending the pursuits of all events concerned.
Whether or not you’re contemplating a special-purpose cash-out refinance or another mortgage refinancing, our crew of consultants is right here to information you each step of the best way.
Contact us to debate your property refinancing aims.
