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  • Writer's pictureLendX Financial

All You Need To Know About Delayed Financing

It is becoming more and more common for people to buy homes with cash, but that also means that all their money would be bound with their newly acquired home. Delayed financing comes to the rescue of such buyers. If you too, are keen on buying a home using all-cash, read on!

What does delayed financing entail?

Without pushing their monthly budget, prospective homeowners can use delayed financing to make an offer on a house. So what is delayed financing, one may ask. It is simply a way to get a mortgage after buying your home with cash. You can buy your new home by paying upfront cash and then get a cash-out refinance to mortgage the property. So, that big chunk of money you paid to buy the home can be used for other stuff such as investing, renovating the home, making more savings, paying off debts, or even buying another home.

Terms of delayed financing

You may now wonder what are the terms of delayed financing like? You have to buy the home with cash and then take a mortgage to get back the price with which you purchased the home. Delayed financing makes room for you to make an all-cash offer to the ones selling the house, and the buyer to get the same money back. A cash-out refinance is used to get a mortgage and the homeowner gets the flexibility of making payments over a bigger period, and saves them for binding all their savings with their new home.

Unlike buying a property using a mortgage, those people who buy it with cash can get delayed financing if the property is bought in the past six months. For those going in for a mortgage, they would need to hold the property title in their name for at least six months before they can take out cash using the refinance route.

Who buys homes with cash? | Circumstances leading to an all-cash purchase

There can be several circumstances under which people may buy homes using the all-cash route. Those whose kids have moved out of their homes and wish to move from a bigger home to a small one i.e. empty nesters often buy homes with cash. They use these homes to start afresh as a retirement abode, and may have paid off the mortgage for their previous home already. They would use the sale proceeds to buy a new and smaller home. Rehabbers or those buying a home which need a lot of repairs, rework, and homes that are uninhabitable in their current state may also buy a home with cash as most lenders are likely to refuse mortgages for uninhabitable homes. Real estate investors also sometimes buy discounted properties using cash. All said and done, delayed financing is popular amongst many who have liquid cash.

If you too are looking for buying a home using all-cash or have any questions or concerns, do write in to LendX Financial in Brampton, Greater Toronto Area.

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