Delayed financing enables individuals who purchased a property with cash to quickly secure a mortgage through a cash-out refinance loan. This approach allows homeowners to access a portion of the funds tied up in their property for a variety of purposes. Essentially, it offers a means to leverage equity from an all-cash sale, freeing up funds for various expenses.
Although a beneficial option for suitable buyers, it’s important to note that delayed financing is not a distinct type of financing. Instead, it serves as an exception to the cash-out refinancing guidelines established by Fannie Mae and Freddie Mac, which typically impose a waiting period of six months for a cash-out refinance. However, in the case of an all-cash purchase, there is no mandatory waiting period before you can refinance your home.
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.