Delayed Financing in Lenoir City, TN
Many of our clients come to my team due to our expertise in delayed financing. Recently, we got a call from a potential customer that was working with another lender who couldn't quite figure it out. Many lenders struggle with delayed financing or don't know it exists, so it's important to work with an expert in getting a delayed financing transaction done.
What is delayed financing?
Delayed financing is simply recouping funds through a refinance that were used to make an all-cash purchase of a home. Many investors use delayed financing to have the benefit of being able to make an all cash offer with the resulting delayed financing loan used to recoup their liquidity after settlement. In many cases, though, delayed financing is used on primary residences for many different reasons.
In this case, our borrower found us after talking with a few lenders who couldn't help, and I realized we'd be able to help. The client was a phenomenal client who made a cash offer in a competitive situation to get her new home in Tennessee, where she'd be relocating from Texas.
One "catch" of delayed financing that many lenders fail to grasp is that cash from a delayed financing transaction must go to replenish the original source of cash used to purchase the home. In this case, that original source was a personal loan from a family member, who used investment funds to make their loan to the borrower. It was a little more complicated than someone using just a checking account, but we documented the paper trail we'd need from start to finish, and our client and her family were able to get us all we needed quickly.
Delayed financing also involves an appraisal (which is great for many investors who do rehab, because we can use the appraised value to determine the amount of cash out they're eligible for - not the purchase price), and in this case, thanks to a competitive market and great appreciation rates, our appraisal came in higher than the original purchase price.
Our client was able to get her new home amidst a lot of competition, and we were able to get her the loan to replenish the funds used to make the purchase, helping secure the optimal scenario for her and her husband as they planned their relocation and new life in Tennessee!
Every loan is a little different, and like time rock climbers spend on a wall, parts of the climb may be easy, but there's almost always a crux. The crux, or the "problem" (in the rock climbing world), is what enables some lenders to do a loan while others fail to get it done (or end up in the downward service spiral of "we need more stuff!"). Our team knows the ins and outs of delayed financing and we've specialized in the product for years, and in this case, the crux was easily overcome on the way to closing.
Have a loan scenario with an interesting crux? Reach out at 484.680.4852 or ask an expert your questions here. We're happy to help, whether it's an easy path to the top or requires some expert level climbing to get there.