All-cash offers tend to have a good amount of sway over a seller’s decision and paying in cash as opposed to financing can help buyers get the house they have been searching for. Unfortunately, a vast majority of buyers are not able to pay cash for a home, putting them at a severe disadvantage if they are in a bidding war with someone who can.
But as The New York Times reports, an option for someone who may have the cash, but doesn’t want to spend their entire savings on a home purchase, is to delay financing by buying with cash but borrowing soon after.
For example, a Fannie Mae program allows some buyers without mortgages to get a cash-out refinance soon after closing on a home, meaning they can get their cash back almost immediately.
For this specific program, borrowers need to prove there are no liens against the home and have to document the sources of the cash for the purchase. And the amount they are allowed to cash out is dependent upon whether the property is a primary or secondary home with a maximum of 70 percent of the home’s appraised value.