Is it true that banks will turn me down on a new mortgage loan shortly after a refinance loan?

One suggestion I have is you can cross-collateralize your current home and your new purchase at the same time. This allows you to purchase a new home, prior to selling or renting, without the need to refinance to get cash-out for your repairs or down payment.

You'll have a better understanding on what your new expenses will be after your new purchase. Then you can decide if you wish to refinance your vacated property as a rental or put it up for sale. .... Happy funding, Rudi

Ed,

You missed Michael's point.  He never said "Independent mortgage originators 9 times out of 10 beat the big guys in rates and fees, not to mention we're required to meet continuing education requirements. "

He never said anything like that, which is nothing more than your spin.  What he said was "In my experience the quality of help you get is directly related to the individual loan officer and not necessarily the company they work for. "

Which I agree with 100%.  The only thing I would add is that there is no real difference to the consumer between a direct lender, correspondent or broker, other than the spin that folks put on it.

No.

I would speak to a financial/tax person about your situation. I would be concerned about throwing chuncks of money at the current mortgage when it might be best to use it for your potential purchase. Once you pay down the mortgage, if that house becomes a rental it could be harder to cash out if you need to in the future. There are tax implecations if your own a primary and a rental so speak to a knowledgable person about the best way to approach this.

Meanwhile, I would suggest that Stephie make that call to BofA or Wells for you. If she's lucky she might be on hold for less than a day.

I'm with Michael on this one, I don't understand why agents have to biased toward big banks and national lenders.  In most cases they aren't working in the best interest of the client, the client is just another account number to them.

Independent mortgage originators 9 times out of 10 beat the big guys in rates and fees, not to mention we're required to meet continuing education requirements.  The big boys can hire anyone off the street and "teach" them the job, often times they tend to neglect teaching their employees the rules and regulations of the real estate business as a whole.

Happy Chef, Michael has given you great advice.  Your best bet is to speak directly with a loan originator so they can guide you in you decision making process. 

I'm not sure why there is a bias towards "direct lenders like Bank of America or Wells Fargo."  In my experience the quality of help you get is directly related to the individual loan officer and not necessarily the company they work for.  That would be like me saying "you should only work with Re/Max agents."  I've recently spoken to three different clients who had the rug pulled out from under them after being in process for 2 months and then being denied. In all three cases they were "pre-approved" by either Bank of America or Wells Fargo.  The loan officer didn't know what they were doing and it wasn't caught until Underwriting. It's shameful.

Happy Chef - there are a couple of issues to watch out for.  When you refinance your current home you will be asked whether or not you "intend' to occupy the home for at least the next 12 months. Answering in the affirmative will get you the best rates as loans for for rental homes are higher than those for owner occupied homes.  However, IF you know you will be leaving the home shortly after refinancing you may have made a fraudulent loan application if you do not properly disclose your intent to vacate the property in a few months.  If you know you are going to vacate the home make sure the lender processes your loan as a non-owner occupied property.

I've spoken to many clients who had another lender tell them this is no big deal and that you should go ahead and apply for the owner occupied loan anyway. The rates will be lower that way and you certainly don't want to pay more, right?  Well, you can certainly chose to do that but just know there are various certifications you sign during the loan process that obligate you to reside in the property as your primary residence and it is mortgage fraud if you do so knowing you will shortly vacate the property.

Regarding the new loan to purchase another property - if you keep your current home (regardless of how you refinance it right now) you will need to qualify with both properties.  A recent trend has seen many home owners "buy and bail."  This occurs when someone owns a property they don't have enough equity in to sell so they qualify to purchase another home. After moving they cease making payments on the other home letting it go to foreclosure. The lenders are very wary of this and have put fairly stringent criteria in place when dealing with an applicant who wants to retain their current residence while purchasing a new one.  Essentially you need good cash reserves to carry both properties for 6 months and be able to prove at least 30% equity in your current residence.  There are exceptions and you may have no problem qualifying regardless.

My recommendation is you talk to a lender you trust right now and go over your entire plan. A professional mortgage originator should be able to walk you through both the refinance and the future purchase and help you avoid any pitfalls ahead of time.

If you have other, more specific, questions about the refinance or qualifying for the future home post back and I'm sure you'll get some helpful replies.

I would contact a direct lender like Bank of America or Wells Fargo and ask them directly.   The answer will depend on your overall credit and income picture also.  Good luck.