Buying cash then refinance

7 Replies

I found a property that i want to buy for 95,000. I was going to get a loan and go 30%down. Then my friend suggested to buy it cash, and offer less at 80,000. Then once i close i refinance. He said it would be same mortgage but i would get the house cheaper.  Can i do this?

The refi will likely be based on the purchase price, if you do it in less than six months.  I know this doesn't seem like a refinance because there's no old loan to pay off.  But it is a refi because you already own the property.  If you wait six plus months and you make improvements to the property (physical or financial) you may be able to use a new appraisal with a higher value.  Making an all cash offer is a powerful tool for motivating sellers.

Originally posted by @Jon Holdman :

The refi will likely be based on the purchase price, if you do it in less than six months.  I know this doesn't seem like a refinance because there's no old loan to pay off.  But it is a refi because you already own the property.  If you wait six plus months and you make improvements to the property (physical or financial) you may be able to use a new appraisal with a higher value.  Making an all cash offer is a powerful tool for motivating sellers.

 Thanks!!! Great info, i am kinda scared cause i own 7 properties and i have all done it the same way so this new way sounded interesting