Delayed financing empowers cash buyers to secure a mortgage through a cash-out refinance loan immediately after acquiring a property or within 90 days from the date of purhcase. Upon refinancing, you receive a portion of the funds, providing flexibility for various purposes. Essentially, it’s a strategy to leverage equity from an all-cash sale, unlocking funds for diverse expenses.
While a valuable tool for specific buyers, it’s important to note that delayed financing isn’t a distinct financing type. Instead, it operates as an exception to the cash-out refinancing guidelines set by Fannie Mae and Freddie Mac, which impose restrictions on when you can refinance your home using a conventional loan.
As per Fannie Mae and Freddie Mac requirements, a typical waiting period of six months is mandated after purchasing a home before conducting a cash-out refinance. However, with an upfront cash purchase, there’s no waiting period to initiate the refinancing process.