What to Know About Delayed Financing Loans

What to Know About Delayed Financing Loans

When you are buying a home, paying cash has many benefits. For example, if you are in a bidding war for buying a house, then being a cash buyer can help you win that war. As a cash buyer, you might be able to get a lower price on the home. That’s because getting approved for a mortgage is not as certain as having cash.

However, mortgages also have their advantages. Right now, mortgage rates are lower than they have been in the past. According to Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage was 4.87 percent when paying for some of the interest up front. The good news is that delayed financing loans give you the best of both options by allowing you to be a cash buyer.

What Is a Delayed Financing Loan?

In a delayed financing loan, you can get cash on your property immediately. This allows you to cover the closing costs and price of a property that you had bought with cash in the past. This gives you the benefit of being a cash buyer, so you can let the sellers know that the transaction will close. The loan gives you the benefit of getting a mortgage after the transaction, so you can avoid having all of your savings in your home.

The benefit of choosing delayed financing is that it gives you an advantage when it comes to negotiating. A cash buyer usually has a benefit in negotiating. However, you still have the flexibility of making payments on the loan instead of using up all of your savings.

Refinancing Your Home

If you purchased a property in the past six months, you can take out the cash immediately without any waiting period. Normally, if you got a home with a mortgage instead of using cash, you would need to be on the home’s title for at least six months before refinancing the home. Delayed financing offers a notable exception.

Benefits of Delayed Financing Loans

When you get a home, a mortgage may not always be possible. For example, if you are buying a foreclosure or working with a short sale, the mortgage process may be complicated. That can make it more difficult to get approved. It’s a good idea to save money for unexpected events. This might not be possible for you without a delayed financing loan.

If you are buying an investment property, you might not want to pay the mortgage until you are starting to see profits from the property. Once you want to get another property, delayed financing can help free up cash that was spent on the first property.

Overview

Delayed financing has its benefits when you are looking to buy a home. But working with the right realtor is just as important. Blue Horizon Realty and Lending Inc. can help you get the home of your dreams in Escondido, CA. Give us a call today at (760) 891-4500 to learn more.