Refi after cash deal

14 Replies

Just signed on first deal. Paid cash for discount and quick close. My question is should I buy Title insurance upfront knowing it s required by lender. I plan to pull my $ back out immediately after cash closing. Dont want to pay twice. Only paid cash because I believe its a good deal. My original plan is to leverage the cash into 3-5 properties.

thank you

@David Nadelstumph  Congratulations on the cash purchase. Assuming you are not looking to make upgrades, you can do a Delayed Financing loan within 60 days and it will be processed as a purchase. Purchase gets you a better rate then cash-out refi.

You only need to get the owners title insurance once, and that too is optional. The owners title insurance is up to the purchase price. You can get a new owners title insurance in the future if the property has appraised a lot and you want more protection. Only the lenders insurance is mandatory. I also suggest that you get a owners title insurance. You don't get it now, and someone shows up a day after the closing, then you will have no protection.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

@David Nadelstumph  Could you keep me posted on your progress. I am in the position to do the exact same thing.  Currently looking for a property or two to purchase at a deal to refi out of and turn those two into 3-6 more.  Was wondering how fast and much hassle it would be to refi back out.

@Marc Oister Sure thing. Im also just starting out. Small world...I grew up in Phila moved south few years ago. Im looking into Phila property as Im finding it difficult to invest here. I talked with "turnkey phiily" company based out of Ft. Washington as well as Ohio cash flow. Have nt yet decided on out of state but I feel I may need to for better returns

Good Luck

You should always get title insurance. 

Originally posted by @Marc Oister :

@David Nadelstumph  Could you keep me posted on your progress. I am in the position to do the exact same thing.  Currently looking for a property or two to purchase at a deal to refi out of and turn those two into 3-6 more.  Was wondering how fast and much hassle it would be to refi back out.

@marc 

@Marc Oister

thank you

Originally posted by @Upen Patel :
@David Nadelstumph Congratulations on the cash purchase. Assuming you are not looking to make upgrades, you can do a Delayed Financing loan within 60 days and it will be processed as a purchase. Purchase gets you a better rate then cash-out refi.

You only need to get the owners title insurance once, and that too is optional. The owners title insurance is up to the purchase price. You can get a new owners title insurance in the future if the property has appraised a lot and you want more protection. Only the lenders insurance is mandatory. I also suggest that you get a owners title insurance. You don't get it now, and someone shows up a day after the closing, then you will have no protection.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

@Upen Patel thank you

@Upen Patel

Do the 60 days count using the mortgage closing date or the application date? Also, what LTV do you offer?

@Upen Patel I went to local bank (bank America ) and was told that program only works for primary residence.

Originally posted by @Andreas W. :

@Upen Patel

Do the 60 days count using the mortgage closing date or the application date? Also, what LTV do you offer?

The process needs to be started within that time frame and closed in a timely manner. So you can't start the file and then close a year later. This is viewed a purchase loan, so applicable the LTV guidelines should be followed.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

Originally posted by @David Nadelstumph :

@Upen Patel I went to local bank (bank America ) and was told that program only works for primary residence.

I can't speak for other lenders.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

Originally posted by @David Nadelstumph :

Just signed on first deal. Paid cash for discount and quick close. My question is should I buy Title insurance upfront knowing it s required by lender. I plan to pull my $ back out immediately after cash closing. Dont want to pay twice. Only paid cash because I believe its a good deal. My original plan is to leverage the cash into 3-5 properties.

thank you

Regarding Delayed Financing Exception (DFE)

I can only speak from a direct FNMA lender position but the amount of time you have to do a delayed financing transaction is actually 6 months after the date of an all cash purchase.

Secondly, this DFE or delayed financing exception can be done for primary, secondary, and investment properties NOT just for primary residences.

Thirdly, you can get cash back up to 70% of the market value up to the total of your acquisition cost at the time of appraisal so if your "purchase price," is 100k and you spent 4k in closing costs then that means you can cash out up to 70%of the appraisal or 104k whichever is "less."

This means if the appraisal is 130k X 70% = $91,000 then that means you will have 13,000 of your money stuck in the property and be able to get out the 91,000 back (minus refi closing costs of course of the DFE transaction).

you would need an appraisal of 104k / 70% = $148,571.43 value or higher in order to get back all of your 100k + 4k closing costs as an example.

Hello all, i am in a simalar situation now. David, how did the refi end up working for you?

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