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Delayed Financing (Paying Cash & Refinancing After Close)

Delayed Financing (Paying Cash & Refinancing After Close)

With so many cash-rich buyers in our California and Texas markets, we want to remind everyone that “Delayed Financing” is sometimes a great option for buyers.

Delayed Financing is a conventional financing provision that allows “all-cash” buyers to immediately do a cash-out refinance after an all-cash purchase closes.

The advantage for buyers of course is that they can make far more competitive all-cash offers and then still take advantage of very low-rate mortgage financing after close.

There are two caveats: (1) the cash for the all-cash purchase must come solely from the borrower’s own funds (no loans of gifts); and (2) the Delayed Financing must close within 180 days of close of escrow.

If buyers use “gift funds” for an all-cash purchase, they have to wait 180 days before they can refinance.

In addition, buyers should know that delayed financing transactions are subject to “cash out” guidelines, with slightly higher interest rates and loan-to-value ratios typically limited to 75%.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167