10 Things Most People Don't Know About Delayed Financing

10 Things Most People Don't Know About Delayed Financing

Real estate investment is one of the most stable and reliable ways to grow your money. If you get property in a good place, it will appreciate considerably as the value increases. 

If you want to get your first house through traditional methods of financing, it may be a bit difficult. These days, cash buyers are more attractive to sellers than traditional financing. So, what do you do if you are unwilling to sink such a large amount in a single property? Delayed financing.


What Is Delayed Financing?

Simply put, delayed financing is when you buy a house with cash and then get a mortgage for the house six months later. You get the cash back through cash-out-refinance, meaning your liquidity is mostly the same. 

Delayed financing is a great way to build your real estate portfolio while maintaining liquidity. If you want to invest in multiple properties and you are sure you can manage the mortgages, it is an ideal arrangement.


How Does It Work?

The first thing you need to have to use delayed financing is a large stash of cash for your offer. 

Next, you will need to find a suitable lender to give you reasonable rates. You will need proof of employment, necessary financial documents, and creditworthiness for the application to get delayed financing. 

After buying the home, you must keep your job and maintain good credit to get the mortgage. The house you want to buy should also not have any tax liens against them. 


Why Use Delayed Financing?




A cash offer helps you stand out from other bidders for the property. It takes about a month or two to obtain a mortgage for a house. With this method, you can bypass all that time, meaning you will get the property sooner.



With delayed financing, you get the benefits that cash buyers have with the money you have. You can pay for the house through a mortgage and maintain your liquidity. You can use this liquidity to invest in other things or other properties. 


Ten Things to Know About Delayed Financing


  • In a competitive space, your bid will have more clout

  • You can bring the house you buy up to code after you buy it

  • You can get the mortgage after upgrading the house, which will increase the house's value

  • If your credit is a problem, you can get the house and improve your credit in the six months of waiting

  • You can purchase any property, residence, investment property, or second home with delayed financing

  • You cannot use delayed financing if the property exceeds six months after the date of purchase

  • You may not get all your money out after getting the mortgage, so your liquidity may be less

  • It is also possible to not get a cash-out refinance

  • To qualify for the mortgage, you need the house appraised. Sometimes, the appraisal may be less than you paid for the house

  • The mortgage interest rates may increase after you purchase the property

For more things most people do not know about delayed financing, visit Blue Horizon Realty and Lending, Inc., at our office in Escondido, California. Call (760) 237-4092 to book an appointment today.

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