11/12/24 – What is Delayed Financing

When there is a hot property, some agents like to pull out all of the stops, have their clients pay cash for a property, and have them refinance immediately. This is called a Delayed Financing Option from Fannie Mae and Freddie Mac, and it can be a powerful tool. This strategy allows clients to access financing shortly after a cash purchase without waiting six months for a traditional cash-out refinance. However, navigating this option carefully is essential, as the agencies have strict guidelines.

Key Points for Your Clients:

Document Every Dollar

1. For clients considering delayed financing, it’s crucial to document the total cash amount used in the purchase. Fannie Mae and Freddie Mac require all funds to be traceable and documented. If any portion of that cash can’t be accounted for, the client must wait at least six months before being eligible for a cash-out refinance. Proper documentation is essential to avoid these delays. ALL OF THESE FUNDS MUST BE THE BORROWERS! Also, remember that delayed financing will only allow a buyer to pull out 80% of the original purchase price.

An Alternative Approach with Family Assistance

1. Another option for clients planning a cash purchase is to borrow the funds from family members. For example, if parents are willing to help, they could lend the purchase amount and secure it with a lien on the property. This approach allows clients to pursue a rate-and-term refinance rather than a cash-out, smoothing the financing process and avoiding the six-month waiting period.

Plan Ahead for a Smooth Transaction

1. Cash offers are undoubtedly attractive in today’s market, but preparation is vital to making a cash purchase work with future financing. Ensuring your clients understand the requirements around delayed financing can prevent frustrating delays and preserve their cash flow.

With the right strategy, cash buyers can enjoy the benefits of financing soon after their purchase without being held back by agency restrictions. Proper planning makes all the difference!

I am available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property. My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text me, please text (661-714-6258) or email me at Mike@AugustaFinancial.com.

But wait, there’s more!

Interest rates are getting hammered again today! There is no new news today, but CPI comes out tomorrow, and let’s hope that number is low!  

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• We do loans in all states, so call me with anything you need.  
• Government Loans (FHA / VA/ USDA) are in the 5’s and 6’s.
• Conventional Loans up to $766,550.00 are in the 6’s
• High Balance Loans $766,550.01 – $ 1,149,825.00 are in the 6’s
• Jumbo loans above $1,149,625 are in the mid to high 6’s
• Bank statement loans - They are available with 10% down again, and larger down payments are in the 6’s.
• Profit and Loss Statement loans – 20% down – You don’t need bank statements, just a profit and loss statement!
• No income qualifier – 40% down with r serves In the 8’s!
• 0 down loans are in the high 6’s – 620 credit score min right now, up to $1,191,000.00.
• Private Money lenders - Hard Money Loans – 35% down!
• No Ratio Loans 30% down
• DSCR – Debt Service Coverage loans with as little as 15% down
• Bridge Loans - typically 7.99% with limited fees – and they get you where you need to go!
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice. The above are LA County Loan Limits.

Good News - NOPE! 

Bad News on Condos – Village Walk – Insurance issues - Insufficient insurance.

False alarm on Mariposa! They still can’t get the coverage needed!     

All other naughty condos have been moved to MikeMeena.com. I will post updates here, but all the information on the naughty list is on my website. Just go there and click about, and you will find our most updated list.

Please let me know if you hear anything new on condos or townhouses.

I am still available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property. My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text me, please text (661-714-6258) or email me at Mike@AugustaFinancial.com.

Have a great day and an even better tomorrow. Please call me when you have a client who needs to borrow!