On the subject of mortgage refinancing, it’s important to know the rules set by Fannie Mae and Freddie Mac. These two government-sponsored enterprises play a vital position within the mortgage trade, and MortgageDepot is proud to make the most of their underwriting tips to make sure easy mortgage approvals.

Fannie Mae’s Necessities

Fannie Mae requires that every one homeowners of the topic property personal it collectively for no less than 12 months, besides in instances of divorce, settlement, or different distinctive circumstances. Because of this in case you’re trying to purchase out the curiosity of one other proprietor by way of a cash-out refinance, all homeowners should have collectively owned the property for at least 12 months. Fannie Mae’s tips don’t impose any particular occupancy or property sort limitations, offering flexibility for debtors.

Freddie Mac’s Necessities

Alternatively, Freddie Mac has barely totally different necessities for Particular Objective Money-Out refinancing. To qualify, all homeowners should 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 enable any money again to the remaining borrower. Because of this in case you’re shopping for out the curiosity of one other proprietor, you can not 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 acquire.

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 relating to 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 workforce of specialists is right here to information you each step of the way in which.

Contact us to debate your property refinancing goals.