This is a reminder that buyers who purchase properties with 100% cash can obtain cash out loans against those properties immediately after close of escrow. This is called “Delayed Financing.”
Delayed financing requires that buyers use ONLY their own funds. If buyers use gift funds for a cash purchase, they must wait 6 months from close of escrow to get cash out financing.
If buyers must pay cash for a property and must use gift funds, and still want to get a loan immediately after close, there is a solution: Buyers should sign a promissory note and deed of trust with the gift-fund-donor as the note-holder and beneficiary (buyers should turn the “gift” into a temporary mortgage).
Buyers can then pay off the gift fund/temporary mortgage with a rate and term refinance at any time.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646
