Posted by John Behle on January 24, 2000 at 20:27:40:
Many lenders have less “title seasoning” requirements than others. Some will refinance you right away. Others won’t. Nothing wrong or illegal with it if they will.
There are a couple problems. One - to refinance you would have to pay off the second or get them to subordinate. You can’t get a new first and not involve the second in some maner.
You could secure their note by another property, have a “partial payoff - partial subordination” situation where they agree to receive a certain amount (like half) now and subordinate to the refinance. That is assuming the lender doing the refinance has no problem with that.
You could also build a pre-payment discount into the note, that if you pay them off earlier than the 6 months they will agree to a discount. That may not be too likely as 6 months isn’t that long to wait.
You can of course pay the second off in full and you would be better of with the rate on a new refinance over the private money rate.
The second problem can be the private money. Even with 13% and a 60% LTV most private lenders would not be interested. Some will want a higher rate. Many will want points. Points are fees up front that you won’t receive back when you refinance.
Now, if you find a private investor that will loan 13% with little or no points - wonderful.