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What is Delayed Financing?

If you recently bought a home with cash but want to get some of that money back, delayed financing allows homebuyers to quickly obtain a cash-out refinance to replenish your funds shortly after closing without the standard six-month waiting period. This option is available for primary residences, second homes, and investment properties. No need to keep all your cash tied up in one property. 

How It Works:

Normally, cash-out refinances require you to own the home for at least six months, but Delayed Financing lets you refinance sooner—as long as you meet certain requirements.

Do You Qualify? You may be eligible if:  

1.  You bought the home in an arms-length transaction (no special deals between family or business partners). 
2.  You did not use a mortgage to buy the property (cash purchases only). 
3.  You can show where the purchase funds came from (bank statements, personal loan documents, or a HELOC from another property). 
4.  The title report confirms no existing liens on the home. 
5.  If you used a loan (other than a mortgage on the home) to buy the property, refinance proceeds must be used to pay off that loan. 
6.  The new loan amount cannot exceed your original purchase price plus closing costs and fees.

Who Can Use Delayed Financing?

1. Fixer-upper buyers: Purchase a home that wouldn’t meet lending standards, renovate it, and refinance.
2. Investors: Quickly access equity for future investments, particularly in short sales or distressed properties.
3. Homeowners downsizing: Use equity from a previous home to buy in cash, then refinance.
4. Buyers in competitive markets: Make strong cash offers and recoup funds later.
5. Buyers with credit challenges: Purchase a home while improving credit to qualify for better loan terms later.

Benefits of Delayed Financing:

1. Make a strong cash offer in a competitive market
2. Avoid financing delays at closing
3. Obtain financing secured by the subject property shortly after closing. 
4. Available for qualified homeowners & investors
5. Unlock Your Cash Sooner – Instead of waiting six months, you can get your funds back right away. 
6. Improve Cash Flow – Use the money for renovations, investments, or other financial goals. 
7. Take Advantage of Low Rates – If rates have improved, you can secure a better financing option.

Key Eligibility Requirements:

1. The cash used for the purchase must be verifiable (not borrowed)
2. Proof of cash purchase: Must show a settlement statement confirming no mortgage was used. 
3. No existing liens: The property must be free of any mortgage or encumbrances. 
4. Arm’s length transaction: Cannot buy from a family member or employer.
   
5. Loan amount cannot exceed the purchase price (plus closing costs & allowable fees)
6. Subject property must be purchased within the last 6 months.
7. Maximum loan-to-value (LTV) ratios:
   • Investment properties: Up to 75% LTV (the lower the LTV, the better the rates)
   • Primary residences: Up to 80% LTV (the lower the LTV, the better the rates)
   • Subject to lender guidelines & program qualifications

Cash-Out Limitations:

1. Borrowers can only cash out up to the amount they originally invested plus closing costs.
2. After six months of ownership, standard cash-out refinance guidelines apply, allowing higher loan amounts.

Next Steps - If you’re interested in refinancing after a cash purchase, let’s talk about your options! I can help you determine if Delayed Financing is right for you and guide you through the process.  Please visit us here for delayed financing rates https://www.pacificcoastfin.com/delayedfinancing.