Delayed Financing (Defined Term) has more to do with avoiding normal Seasoning Requirements (6 months) when doing a Cash-Out Refi then really anything else. It could be called “No Seasoning Cash-Out Refinancing”. Basically Someone delays getting financing by first paying cash (or can be from a HELOC, or secure loan) and THEN decides to put financing on the property after COE but doesn’t want to wait the standard 6 months seasoning!

2 scenarios could happen

• Not realizing it Ahead-of-Time: Use your own cash to buy and then you decide to replenish cash and don’t want to wait the std 6 months seasoning requirement for CashOut.

• Planning Ahead-of-Time: same concept above

Why would someone ever want to do Delayed Financing (what is the benefit)?

• Avoid Seasoning Requirement for Cash-Out Refi

• Want quick COE and save time by paying cash

• Better negotiating position by offering to pay cash

Requirements

• Follow standard Cash-Out LTV & Cash-Out Interest Rates

• New Appraisal Required

• Money replenishes where money came from

Example for Delayed Financing

• Bought Home For: $200,000

• CCs/PPs: $5,000

• Max Loan: $205,000

• New Appraised Value = $230,000 x .80% LTV (for Primary) = $184,000 Max Loan

• Like having put an original 8% down-payment

Alternate way to do delayed financing

Example – Parent buying a home for child with cash and then child does R/T refinance to cashout parent. Requirements:

• Parent would have to have basic standard loan with child (deed of trust etc…title company can really help) and then child would do normal R/T Refinance to pay Parent off

• R/T Refinancing LTV and Interest Rate % would apply

• New Appraisal would be required

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

•••

Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

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