Can You Refinance a Home That Is on MLS?
Refinancing your home can result in lower monthly payments in spite of the costs associated with the refinancing process. Yet refinancing is not as easy as it was in the first few years of the 21st century. With the real estate crisis came new and tighter loan regulations. Some struggling homeowners opt to sell the property and then decide to refinance. If you have your house on the market, refinancing may not be an option.
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MLS Definition
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If your house is on the MLS, it means you have it listed for sale. MLS, or multiple listing services, is a private database owned by real estate professionals and is a marketing tool. When a real estate licensee who is a member of an MLS lists property, that property goes on the MLS. When your house is on the MLS, anyone who goes online can access the listing information, showing you have the property on the market. After you take the house off the market, members of the local MLS can access the information, showing when your house was on the market.
Lender Guidelines
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Guidelines within the lending industry generally specify that properties currently on the market are not eligible for refinancing. If the borrower secures a new loan and turns around and sells the property within six months, the lender typically would lose money. There can always be exceptions, such as refinancing using a private lender or hard money. A hard money loan is one from a lender charging high interest and fees.
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Six-Month Rule
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Simply taking your property off the market will not make you eligible for refinancing. Many lenders require the property to be off the market for a minimum of six months before accepting an application for refinancing. Yet some lenders are willing to make exceptions, depending on the circumstance. For example, the property owner's employer might have been transferring them to another location and then cancelled the transfer.
Lender Fraud
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While it might be tempting for a desperate property owner to leave his house on the market while attempting to refinance or lie to the lender about just taking the property off the market, it is a bad idea. Misleading or lying to a lender is lender fraud, which could result in legal action. If your lender encourages you to lie on your loan application and actively conceal the fact your property was listed within the last six months, find another lender or simply wait six months.
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References
- Photo Credit House for sale image by Heng kong Chen from Fotolia.com
