What You Need to Know about Delayed Refinancing

Delayed RefinancingBuying a home is probably one of the biggest financial choices that you will ever make, so it's imperative to be well aware of all your financing options. With more than 50 percent of home purchases in the state of New York being "all-cash" transactions, you might want to consider the benefit of using cash to win the bid on a home. After all, 50 percent is an astounding figure. But what if you don't want to invest all of your cash? Is there a way to overcome this obstacle? Sure, and it comes in the form of delayed financing. This type of financing allows you to pay cash for a home or investment property, directly followed by completing a cash-out refinance, meaning you can put the cash back in your pocket. Here's the lowdown on delayed refinancing FAQ, and how it can be of benefit to you. When did delayed financing become available? As surprising as it may be, delayed refinancing has been available since way back in 2011. Before the delayed refinancing program was put into effect, both buyers and investors were not allowed to complete a cash-out refinance until at least six months had passed since the initial purchase transaction had taken place. Should I consider delayed refinancing as one of my mortgage options? No, because it is not a mortgage option. Delayed refinancing simply erases the original boundary that stopped buyers and investors from completing a cash-out refinance before six months had passed since they bought the property. What requirements do I have to meet to qualify for delayed refinancing?
  • The money (cash) that is initially used to buy the property must be recognized and documented to the bank
  • The refinance loan cannot be greater than the initial loan
  • There cannot be any liens against the home
Can I use the delayed refinancing option for properties other than my primary residence? Absolutely. In fact, many buyers and investors take advantage of delayed refinancing on both vacation and investment properties. Also, keep in mind that even if you have more than four properties that have already been financed, delayed financing is still an option in many situations. When does my ability to take advantage of delayed refinancing end? Delayed refinancing is available up until six months after the initial purchase of a property was made. You can still refinance after six months, however, it will have to be through a different program. Am I able to use delayed refinancing as a way to recoup the money I invest in renovations? Wouldn't that be nice if you could? But no, you cannot use this form of refinancing for this purpose. In fact, you'll have to wait six months and then meet the requirements accompanied with standard cash-out refinancing guidelines. Is it smart to take advantage of delayed refinancing? If you have cash that you would like to invest in a different way other than putting it toward the purchase of a home or investment property, then yes delayed refinancing is smart. You can use the cash to buy the property, and then acquire the cash back by using delayed refinancing.  

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