How long does the borrower typically have to wait before closing on a fixer-upper after refinancing their primary residence?

When a borrower refinances their primary residence and intends to use the equity for purchasing a fixer-upper, there is a specific waiting period before closing on the new property. This period is often referred to as the "seasoning" period. In the context of refinancing, federal regulations typically require a waiting period of three business days between the close of the refinance transaction and when the proceeds can be used for another purchase. This rule helps ensure that the borrower has fully completed the refinancing process and has a clear understanding of their financial commitments before taking on new debt through the purchase of a property.

Waiting three business days allows for the necessary administrative processes to conclude, including ensuring that the loan documents are finalized and funds are properly allocated. This waiting period serves to protect both the lender and the borrower by providing time to review and confirm the terms of the refinanced loan, as well as the implications of leveraging the home's equity for a new investment.

Understanding this regulation is essential for borrowers looking to make strategic real estate investments, as it impacts the timing of their transactions and financial planning.