Using Delayed Financing To Buy A Home

Combine the advantages of paying cash with the security of a mortgage

Using Delayed Financing To Buy A Home
July 25, 2016

When sellers are considering offers for their property, they're much more likely to accept a cash bid over a financed one because the transaction can be completed faster. There's no paperwork to do, nor does the buyer have to wait for the lender to finalize their mortgage. As a result, some buyers who depend on financing lose out on the home of their dreams when a cash buyer comes in. There is a solution for those tired of watching cash buyers win every bidding war on a property: delayed financing.

Delayed financing requires the buyer to have the asking price in cash up front, which still makes it impossible for some buyers. Some pull from their savings and retirement funds, while others ask friends or family for short-term personal loans. Once they have the cash in hand, they can make their offer and buy their new home.

Next, they go to a lender and apply for a personal loan. There are a couple of options for buyers here. The first is to make use of a program offered by Fannie Mae. This program allows buyers to get a cash-out refinance after purchasing their home, which provides them with most or all the cash back. For larger purchases, borrowers may have to apply for a non-agency jumbo mortgage that would not be subject to the rules of traditional mortgages.

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