Refi to Buy… Too Soon?

Earlier this year, we worked with a couple that was accessing equity to do repairs on their primary residence. It was straightforward — they had plenty of equity, so we pulled the cash they needed to fix it up and we settled on the deal.

Little did they know they would find the home of their dreams six months later. So what’s the problem? Well, when you refinance a primary residence, you sign a form stating that you intend to reside in that home for a year as your primary. This puts them in a difficult position. They didn’t have the money to put 15 or 20 percent down, so they needed to buy the new home as a primary residence.

How did we make this work? First off, I knew the refinance needed to be addressed since it was done in the past year. It sounds simple, but identifying that it needs to be addressed is often overlooked. From there, we did our research on the location of the new property: the proximity it was to his family, his work, his wife’s work, etc. We documented that his current home was listed for sale, provided the listing contract he signed with the local realtor, and a detailed breakdown of the purpose of the move. The deal settled in a few weeks!

The devil is in the details, and we essentially built a case that justified the move. This deal would have been turned down had we not done the legwork for them upfront.

I’ve seen this same situation denied on multiple occasions because a lender doesn’t have the foresight to see and detail the necessary information. Lending is not something where you cross your fingers and hope for the best. Work with someone who is going to put you in a position to achieve your dreams!