Can I Refinance a Mortgage While the House Is on the Market?
Most lenders do not refinance a mortgage while a house is on the market, since the property secures the loan. Some lenders do not refinance for up to six months or longer after an owner removes a house from the market.
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Significance
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If you recently had your home listed on the MLS, or the Multiple Listing Service, most lenders will not refinance until you remove the listing. Appraisers are required to note market listings and take photos of the home.
Valuation
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Take care when figuring the value of your home if it was recently on the market. If you give a value equal to the amount for which the house listed for sale, the lender may be wary, since the house should have sold if the value was fair and accurate.
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Considerations
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If your property was listed for six months or longer, a lender is more likely to suspect defects in the house, which may affect how much can be refinanced, if anything at all. It is likely you will be required to write a letter of intent to establish your intentions for remaining in the home, along with a verification letter from your Realtor that the house is no longer listed for sale.
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