Any benefits to buying a primary residence house cash then refi?

7 Replies

This is for my personal residence - not an investment property.

My new home will cost 750K.  I am able to comfortably put 550K down, then stretch to pay the rest by dipping into savings/stock investments.

Is there any significant benefit to doing an all cash deal initially, then refinancing later on to get liquid again?  I dont anticipate having any trouble with the bank to get my loan so i am wondering if it is worth the hassle.

What can a refinance do that keeping your cash liquid wouldn't be able to? What's your goal here? 

@Nick Arenaso I think you can do delayed financing and not really take a “hit”. That said, the only reasons I could think of are 1.) it gets you a price discount because of your all-cash terms or 2.) your better terms let you beat out an identical purchase price offer. Either way, I’m your shoes I’d want to get debt on the property ASAP. I’d wager rates stand a better chance of going up over the next 6 months than coming down 🤷🏻‍♂️

Also keep in mind that primary residence interest rates are much lower than refinance rates.

You can apply the BRRR method to a primary residence. Just make sure you are getting the property at a steep discount, and improving it through renovations enough that you will get your money back when you refi AND be comfortable with the monthly payments.

The only reason to do this, in my opinion, would be if you really love this property and you know there are gonna be multiple offers on it. Your cash offer with a quick close will most likely best out your competition. You can probably lower the price just a bit as well to cover your refinance costs after your purchase and I would imagine you could do an immediate refinance with the delayed financing. So I would only do this if I really really just loved the property and had to beat out for sure competition. And if your gonna make an all cash offer make the closing a fast one as well to improve your position over the other buyers. Otherwise just pull a loan and do the one purchase. Just my thoughts on this one.

thanks all - i got the answers I needed and i learned about delayed financing which i never knew existed


Nick- just a thought if you put 550k down and next year the market tanks  how much do you stand to loose.  If you have 550k cash that money should be going a bit further for you and putting it in a 750k house to have a 200k mortgage does seem to reasonable. 

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