Seasoning
The length of time a borrower has owned a property or held funds, required by lenders before certain transactions.
Definition
Seasoning refers to the minimum period of time a lender requires before allowing certain transactions. Title seasoning means how long you've owned a property before you can refinance — many lenders require 6-12 months of ownership before a cash-out refinance. Cash seasoning means how long funds have been in your account — lenders want to see 60-90 days of bank statements showing stable balances rather than recently deposited large sums. Seasoning requirements exist to prevent fraud and ensure financial stability. Understanding seasoning requirements is critical for BRRRR investors who need to plan their refinance timeline accordingly.
How This Relates to DSCR Loans
DSCR lender seasoning requirements vary widely. Some require 6 months of ownership before a cash-out refinance, while others allow immediate refinance with certain conditions.
Related Terms
Cash-Out Refinance
Replacing an existing mortgage with a larger one and taking the difference in cash.
BRRRR Strategy
Buy, Rehab, Rent, Refinance, Repeat — a strategy for recycling capital to build a rental portfolio.
Underwriting
The process by which a lender evaluates the risk of a loan application before approving it.
Reserves
Liquid funds required by the lender to be available after closing, typically measured in months of PITIA.
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