Delayed Financing: What Is It? How Does It Work? | Chris OReilly, Long Grove Mortgage | NMLS 145242

Long Grove Mortgage’s Senior Mortgage Consultant Chris O’Reilly explains how delayed financing works, and how it’s helped her clients win deals in today’s competitive market.

Delayed financing is a product that’s available to buyers who have the ability to pay cash but don’t necessarily want to keep all their cash in the home so they pay cash for it making their offer really competitive and then they have the ability to take advantage of delayed financing and get that money back into their accounts how competitive are you if you’re

Offering to pay cash the seller sees that and they think to themselves no appraisal no underwriting no you know this time-consuming process that buying a home can be this guy’s offering me cash so that really can make your uh your contract your offer very competitive and beat out several others what are some of the criteria that a client would have to meet in

Order to leverage that strategy the lender requirements for where the funds can come from it just has to be borrowers own funds so it can’t be that you’ve taken a loan from another bank and you want to pay them back but it can come from your personal savings or 401k or iras cds anything like that well what if i i mean i i think that a lot of retirement funds and

Those kinds of savings accounts will penalize me if i take my money out so would that wouldn’t that be an issue it could be an issue if uh if you didn’t get funds back within 60 days so for example we had a client that was just literally just closed sent me their paperwork the next day we started processing the loan they had their money back in their account

See also  The Leveraged Buyout of Cheek Products, Inc. - Finance 624/ Group 2

Within 30 days so there was no penalty and then documentation wise it’s the normal documentation of applying for a mortgage but in addition to that you’re then showing the settlement statement to show you bought the home and that there’s no mortgage on the home that’s how they verify that you’ve paid cash are there limitations on the kinds of properties that are

Eligible it can be a primary residence it can be a second home it can be an investment property a single family condo just no manufactured mobile homes got it okay the last client that used delayed financing was purchasing a cottage in southern illinois it was a long time client of ours decided to pay cash for the property so that they could put in a really

Competitive offer they sent us this settlement statement showing that they had paid cash for the property and we immediately started working on it got their cash out refinance process and their money back to them in time so that they did not have any irs tax ramifications with their investment account and how long did it take you to get that cash back in their

Account 22 days they had the cash back in their account as soon as they closed with their cash transaction they then were eligible for 80 percent to take the cash out so essentially it was like they would be putting 20 down on their purchase right well the appraisal came in a little bit higher and appraised for higher than they actually paid for it so they were

See also  Knowledge Nuggets series part 28 - Deficit Financing - Vishal Prabhukhanolkar - recording at Proton

Able to recoup even more the lender will allow you to use the new appraised value up to 80 percent it just can’t exceed what you bought it for your new load amount can’t exceed what you bought it for but so you have the benefit of this new appraisal to use in your favor too you

Transcribed from video
Delayed Financing: What Is It? How Does It Work? | Chris O'Reilly, Long Grove Mortgage | NMLS 145242 By Long Grove Mortgage Bancorp