Delayed FinancingWhy this cash purchase option is growing in popularity

Avraham Glattman

In a competitive market like NYC,homes sell quickly, leaving littleroom for traditional options like

financing.

Securing a mortgage for a homehas long been the standard forbuyers, but it can be a dealbreaker for certain sellers.

The reality is, the mortgageapplication takes time, and ifsomeone is denied, a previousdeal between the seller andpurchaser can be rescinded.

In that time, a seller misses out onpotential purchases and couldactually spend more time andmoney trying to promote the

place.

As a result, cash purchases areseen as more attractive, since theyhelp speedup the closing process

and are more certain.

While paying cash for a home is notsomething everyone can do, thosewho have the resources benefit

greatly from doing so.

Also, there is an opportunity to getthe home at a lower price, since thebuyer is providing a benefit to theseller and may gain leverage as a

result.

It may surprise you to know thatapproximately 30% of homes are

purchased with cash overmortgage options.

Yet, because of recentdevelopments like delayed

financing, home purchasers havemore options.

You can pay with cash and thenreplenish your assets by securing amortgage for the amount after the

fact.

Previously, most of these programsrequired a wait of at least sixmonths. Now, this option is

available almost immediately.

The requirements for such a dealthrough a company like Fannie Mae

are:

The loan cannot exceed the documented purchase price plus closingcosts.

The home purchase must have been an arm's-length transaction, not asweetheart deal, like a sale from parent to child.

There must be a title search to prove there are no liens against theproperty and that no mortgage financing was used to buy it. The buyer

must document the source of funds used for the purchase.

Source: http://www.bankingmyway.com/

One thing to know is that the cashout option is limited to 70% of thehome's value, but there are many

other benefits.

Source: http://www.bankingmyway.com/

For more infoVisit my latest blog on the subject.

www.RayGlattman.com