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What is Delayed Financing?

Delayed financing is when a buyer pays for their home upfront with cash, and then immediately obtains a mortgage after the home is purchased.

What are its advantages?

The biggest advantage of delayed financing is the power of paying cash. A cash offer provides buyers with a competitive edge and allows them to stand out in a seller’s market, much like the one we find ourselves in today.

This method allows the buyer to make an enticing all-cash offer, then immediately puts the money right back into their pockets with a cash-out refinance.

What are the restrictions?

• The amount of the mortgage loan obtained cannot be greater than the amount of the purchase price, closing costs, prepaid fees, and points, combined.
• Applicants must have proof of cash purchase.
• Applicants must provide proof of the initial source of cash used for the purchase of the home.
• Applicants cannot apply for delayed financing with a home they purchased from someone they have a personal relationship with.
• If funds are provided from a third party, applicants must provide a gift letter.
• If applicants were provided a gift fund for the purchase of the home, they cannot give the cash from the cash-out refinance back to the donor.
• The property must be free from any liens.
  
  

To learn more about delayed financing and if it is right for you – contact a VanDyk Loan Originator today!