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What Does Your House Choice Say About Which Avenger You Would Be? - Quicken Loans Zing Blog

Paying for a house with cash has definite perks. Did you know that paying cash rather than getting a mortgage could help you win a bidding war when buying a new home? You may even be able to negotiate a lower price on the home if you’re paying cash. After all, cash in hand is a sure thing, and a mortgage approval isn’t always guaranteed.

The good news is you can get the best of both worlds with delayed financing, a cash-out refinance option for recent cash buyers.

What Is Delayed Financing?

In a delayed financing transaction, you can take cash out on a property immediately in order to cover the purchase price and closing costs for a property you had previously bought with cash. This allows you to have the advantage of being a cash buyer and gives sellers the chance to know the transaction will close, while giving you the ability to get a mortgage shortly thereafter in order to avoid having all your savings tied up in your house.

You can think of delayed financing as a way to give yourself the negotiating advantage that comes along with paying in cash for the home, while still giving yourself the long-term financial flexibility afforded by making monthly payments on a mortgage instead of making yourself “house poor.”

Why Take On Debt When Your House Is Paid Off?

While paying off debt and keeping it off is always appealing, mortgage debt is often considered a good debt because, over time, it can increase your wealth.

Low Interest Rates

Mortgage interest rates continue to be at or near historic lows. Today’s mortgage rates are hovering just over 3% for a 30-year fixed-rate mortgage. By contrast, 20 years ago, the best rate you could have gotten would have been just below 7%.


In this low-interest environment, doesn’t it make sense to take the bulk of your cash back, get a mortgage to buy your house and find another use for your savings? What if you invested that money? What if you had major renovations for your new home in mind?

Build Credit

It may seem counterintuitive, but having no debt isn’t the key to being a good credit risk. In fact, it’s probably going to hurt you when it’s time to get a loan.

By having mortgage debt and repaying it faithfully and punctually, you’re building a favorable credit history. In the future, when you need a loan, it’ll be available to you, and at the lowest possible rates.

It’s important to note that it will help to have a preexisting credit history with credit cards, personal, student or auto loans prior to getting a mortgage. Your home loan is just one more thing that helps add to your history.

Credit Utilization

Having a solid history of repaying debt is only one factor that lenders analyze when evaluating your creditworthiness. Another factor they consider is your credit utilization ratio, which is the amount of credit you’re actually using at any given time. Lenders like to see that you know how to manage your credit.

Liquidity, Or Cash On Hand To Invest

If you’re an investor or you want to become one, you know the value of having cash on hand. While mortgage rates are low, and the stock market and real estate investments are offering the potential for high returns, it makes more sense to get your cash back out of your home and use it to build your investment portfolio.

When considering an investment strategy, make sure to evaluate your risk tolerance and balance your portfolio periodically to mitigate risk.

How Long Do You Have To Wait To Refinance?

If you’re doing a delayed financing transaction on a property you purchased in the last 6 months, you’re allowed to take cash out immediately without any waiting period.

Under normal circumstances, if you bought a home with a mortgage instead of cash, you have to be on the title at least 6 months before you can take cash out and refinance your home, so delayed financing is a notable exception.

When Would You Use Delayed Financing?

So now that you understand what delayed financing is, you might wonder why you would choose it over more common financing options like getting a mortgage upfront and sticking with it or doing a cash-out refinance down the road.

Well, aside from being able to take cash out on the home without waiting for seasoning, there are some other reasons it might be a good option. Let’s briefly go over the pros and cons.

Pros Of Using Delayed Financing

There are lots of reasons why delayed financing might be beneficial to your financial picture and business needs. Let’s take a look at some.

  • You may be trying to buy a home in a red-hot real estate market and be forced to offer all cash, even though it took all the cash you had. In some markets – notably (pre-pandemic) San Francisco and New York City, and currently in markets all over the country – buyers are being forced to make all-cash offers to have any hope of getting sellers to accept, even if it leaves them in a tight cash bind.
  • A mortgage might not be feasible at the time of purchase. Trying to buy foreclosures and short sales can complicate the mortgage process and sometimes make it impossible to get approved for financing. That’s why liquidity is all-important to real estate investors, and why taking cash paid for a home out through delayed financing is important for the next deal.
  • When buying an investment property, you may not want to pay on a mortgage until it’s time to rent out the property. Once you’re ready to buy another property, delayed financing can free up the cash you spent on the first investment property, so you can buy another one or use the cash in some other way.
  • You might accrue unexpected debt after buying a home with cash, or you might just need more liquid assets. Either of these scenarios would be difficult to resolve if you spent all your cash on the purchase of a new home, but delayed financing can help with that.
  • You might be a real estate investor who needs to ease your tax burden. If you buy and sell homes a lot, you might want to consult a tax advisor to see how delayed financing can benefit you. As an example, you can often deduct mortgage interest from your taxes.

Cons Of Delayed Financing

Let’s review some of the things you’ll need to think about before you decide how to proceed.

  • You need lots of cash upfront to buy a home because you won’t be getting the mortgage upfront. This can be a challenge if you don’t have lots of available assets.
  • There’s some additional documentation required to get a loan with delayed financing. In addition to the usual mortgage documentation, you would need regarding income, assets and credit, you need a few more items. We’ll get into them below so you can be prepared.
  • This is only offered on conventional and jumbo loans. Conventional loans are backed by Fannie Mae or Freddie Mac and are not FHA, VA or USDA loans, but must comply with some rules for resale, which we’ll discuss below. Jumbo loans are nonconforming because they exceed the maximums allowed for conforming loans.

At minimum, you must have a median FICO® Score of 620 or higher, among other qualifications. The minimum score for a Jumbo Smart loan from Rocket Mortgage® is 680 or better.

What Are Fannie Mae’s Eligibility Requirements For Delayed Financing?

You’ll get the best mortgage rates on conforming loans, or mortgages that are eligible for resale to Fannie Mae or Freddie Mac after origination. If you’re applying for a nonconforming loan, you won’t have to comply with these rules.

In order to qualify for a conforming mortgage through delayed financing, you must comply with their rules. Fannie Mae is the largest purchaser of mortgages by far, so you’ll most likely have to meet its requirements to be eligible for delayed financing. Let’s take a look at those:

  • Your new loan amount can’t be higher than the total of what you paid for the home, including the purchase price, closing costs, prepaid fees and points.
  • Your original purchase had to have been what’s called an “arm’s length transaction.” That means you can’t be related to or have a personal relationship with the seller. For example, you can’t buy a house with cash from your parents, your boss or your friend and then get delayed financing on it.
  • You need to provide proof that you paid in cash, like your Closing Disclosure, settlement documents or recorded trustee’s deed showing that no mortgage was used to obtain the property.
  • You have to share documentation of the source of the funds you used to purchase the house.
  • If you use savings earned from your employment income or an unsecured loan like a personal loan, you’d need to share the documentation of those transactions.
  • If you have a loan secured by an asset other than the new property (a home equity line of credit, or HELOC, on another home), you’d need to show that the cash you took out was used to pay off or pay down the loan or HELOC on that other property and not to pay for the purchase of the new home.
  • If you were given gift funds for the cash purchase of your new property, you can’t reimburse the donor with the proceeds you’ll get from delayed financing.

Keep in mind that all of these requirements may vary depending on the type of loan product you’re looking for and what lender you’re working with. Speak with a Home Loan Expert for further details.

Why Might My Delayed Financing Fall Through?

There are a lot of requirements and, as you can imagine, sometimes things don’t work out perfectly and your financing ends up falling through. There are two main reasons why delayed financing loans fail to close.

Documentation Issues

There are a lot of documentation requirements for delayed financing. If you don’t have everything you need, you’ll have to wait at least 6 months from the date you purchased the property to complete a typical cash-out refinance.

Appraisal Issues

You may or may not have had the house appraised when you bought it, but a lender will require a home appraisal before your mortgage can be approved. If the house appraises for lower than the price you paid for it, you’ll have to figure out a different financing option or absorb the difference.

The Bottom Line: Delayed Financing Can Free Up Your Money For Better Opportunities

Delayed financing helps you take advantage of opportunities by keeping homeowners and real estate investors liquid after the all-cash purchase of property. If you purchased your home with cash and are tired of feeling house poor, talk to one of our mortgage experts about whether you qualify for a delayed financing mortgage. Ready to start your application? We’ll be here to help every step of the way.

This Post Has 56 Comments

  1. Do you offer this option in Texas? Im buying a duplex cash and will be living in one side as a primary. Its 300k purchase price and I be using funds from my savings and checking and the rest will be 100k in my personal non heloc lines of credit from a bank. Also thinking of using some hard money funds or 401k so I wont be as cash poor, but not sure if this is permitted under delayed financing? Im an LO for a certain bank but we dont have many options in TX

    1. Hi Vette:

      We do offer this option in Texas. If you would like to go over options, I recommend giving us a call at (800) 442-4383. Thanks!

  2. Isn’t it painfully obvious by now that either the moderators are completely ineffective in “getting this to our Client Relationship Team” or management is completely ineffectively at training their “Home Loan Experts” on something as simple as delayed financing. This article was posted in 2018 and it is now May 2021 and people in the comments continue to indicate that they called Quicken/Rocket to do delayed financing and have been met with nothing but “we don’t do this” or them pushing another type of sale.

    So, back to the original question that arose back in 2018 when this article was first posted and the delayed financing option was tossed out here as bait: Does Quicken/Rocket offer delayed financing or not? And if they do, as you insist in every response, including the most recent inquiries, when will Quicken/Rocket loan “experts” be trained on how to do it and actually be willing to offer it?

    Or is this a classic bait and switch? Lure people in with the offer of delayed financing and then having a Quicken/Rocket “expert” sway you into waiting a few months to do a traditional cashout refi, which comes with significantly higher fees to both Quicken/Rocket and the sales expert?

    Please don’t just respond back with the same message that you guys definitely offer delayed financing and that you will pass this on to the Client Relations Team. Time to change up the tactics up a bit, don’t you think?

    1. Hi Terry:

      I’m going to start this by saying that we will be getting this comment to our team because if you’ve been told we don’t offer delayed financing, you’ve been misinformed. That’s something we need to look into. However, I can tell you unequivocally that we offer delayed financing. Additionally, we aim to do the right thing and serve every client, every time. As a practical matter, delayed financing is the same thing as a cash-out refi. The only difference is that you don’t have to wait 6 months to undertake delayed financing as you might if you already have an existing mortgage on the property. If there’s any confusion from our team, that may be why. However, we absolutely offer delayed financing, subject to the conditions laid out in the post above.

  3. What a lousy bunch of loan officers quicken loans have! You posted your blog in 2017 and it’s 2021 and non of the officers I spoke with know what a delayed financing is! seriously? I spoke with THREE not one – the first one (Tom) went straight to assuming it’s a refinance, then when I repeated my question whether he knows what a delayed financing is he transferred me to another “specialist” (Carl) who also completely ignored what I was asking him and tried to push for a new loan and get information about the property. The third one (Kevin) again tried to push for refinance and asked me whether I have already purchased the property. In the end I said none of you guys know what I’m talking about and there’s no point in continuing this call. I’m really surprised at you (Kevin) to push such a false capability of Quicken Loans when NO ONE knows what the heck is it.

    Seriously what was the post for?

    1. Hi Ross:

      I think part of the confusion here might stem from the fact that it’s treated like a refinance. The only difference is that you don’t have a mortgage currently on the property. It’s not a purchase loan because you already have the property. That said, we do offer delayed financing. I’m going to get this to our team to look into what you’ve been told up to this point. Thank you for reaching out!

      1. I talked to an agent today and was told that there were no other options other than a refinancing and that you had to be on the title for six months before you were eligible. There seems to be a massive disconnect on how this option works.

        1. Hi Channing:

          I’m sorry to hear you’ve had this experience. I tell you that the option is definitely offered. I’m going to get this to our team to see what you were told. Have a good night!

          1. I would be interested in this also as I just spoke to a agent with quicken loans and they did not no any about delayed financing. Who can I contact at this company that knows something about this. We are scheduled to close on the 29th of this month and need to work quickly.

          2. Hi Esther:

            I’m going to get this in front of our team. Someone will be reaching out soon. Thank you for bringing this to our attention!

          3. Hi Kay:

            I can certainly tell you that this is something we offer and would love to help you with. You should be able to get started online or give us a call at (888) 980-6716. Let me know if you’re having any issues. Thanks!

  4. I called Quicken Loans asking specifically about delayed financing. Your agents had never heard of it. I explained what the program was, and what I know of how it works. Your agent said Quicken Loans doesn’t do that. I asked him to please check with a manager to be sure, because I was hearing otherwise from other sources.

    He came back and said Quicken Loans doesn’t do delayed financing, but he was very eager to try to sell me a loan on my next purchase. So I asked about current rates. He said he couldn’t give me any without running my credit first. I said that I understood that he couldn’t guarantee that rate without running my credit, but that all I wanted a ballpark estimate to see if Quicken Loans would even be competitive, before taking the credit score ding from a hard credit check. He said you guys are competitive on speed, but he could not give me any rate numbers at all. Really?

    Gee, with such lousy communication and training with your company, and such lousy customer service, you still expect people to trust you to get it right all the way through closing a loan on a home? Your company’s ignorance could cost clients a lot of money and heartache AND cause them not to be able to close on their dream home!

    1. Hi Suzanne:

      I’m going to have someone look into your experience. Although certain requirements have to be met, we do offer delayed financing. I also understand the way you feel regarding the conversation on interest rates. Thank you for reaching out!

  5. If my mother is giving me the cash to pay for a home, and then I want to do delayed financing to pay her back within the first few months, is this possible?

    1. Hi Amy:

      Unfortunately, this isn’t something we can do. The funds have to be sourced and used directly for the payment of the house. You can’t get them from a relative and pay the relative back. I’m sorry.

  6. I am looking at buying a condo from my parents. If in pay 60k cash, and they gift me 60k equity, i own the house outright for a total purchase price of 120k. Can i get a cash out refi the next week and pull at least 60k out of the condo?

    1. Hi James:

      Delayed financing may or may not be an option. I recommend speaking to a Home Loan Expert at (888) 980-6716. Thanks!

  7. I’m having a problem getting delayed financing at Quicken. I followed all the guidelines that you posted here. You indicated an unsecured loan could be used to pay cash for a property
    “If you use savings earned from your employment income or an unsecured loan like a personal loan, you’d need to share the documentation of those transactions”.

    According to Jay Kou, an unsecured loan is NOT permissible.

    Please amend this post so no one else is mislead.

    1. Hi Jeanne:

      I’ve checked our internal documentation and this post is still correct. I’m going to get this to our Client Relations team to look into exactly what you were told. Thanks for bringing this to our attention!

    1. Hi Kristie:

      I’m going to recommend you speak with one of our Home Loan Experts. I can tell you that are income requirements for delayed financing are the same as they would be would be for a standard loan. What income history we need from you would depend on the exact specifications of the loan product you’re getting, so it’s best to speak with a member of our team at (888) 980-6716.

  8. Hello, can you do delayed financing for less than $50,000? If I purchase a house for $40,000, can I get a delayed financing mortgage loan for $40,000?

    Thank you,
    Joseph

    1. Hi Joseph:

      The only places where we have minimum loan amounts are Alaska and Iowa where the minimum would be $25,000. Beyond that, it just comes down to whether the closing costs make sense for your particular situation. I’m going to suggest you speak with one of our Home Loan Experts at (888) 980-6716. Have a good night!

  9. I just tried calling several people at quicken loans. And no one seems to know what delayed financing is. They said I must wait 6 months to get the loan. I said I am wrong and “there is no way quicken loans will not wait 6 months.” Any way I can get a hold of someone who knows about delayed financing ?

    1. Hi Ashish:

      I’m going to get this to our Client Relations team to look into your experience. The only other thing I can think might come into play is that it has to be a conventional or jumbo loan, but I’m definitely going to have someone reach out. Thank you for making us aware of this and have a good day!

    1. Hi Edwina:

      Yes we do. There are no state restrictions for delayed financing. If you’re interested, you can get started with one of our Home Loan Experts at (888) 980-6716. Hope this helps! Have a good day!

  10. I just tried this delayed financing option with Loan Depot. It all went well for about a week. Then I got denied. Their explanation was that the State of Texas has a rule prohibiting delayed financing within the 6 month period. Not sure if that’s right but if true the state you live in may also affect a successful outcome.

    1. Hi Douglas:

      I’m not a licensed mortgage banker, so I can’t speak to whether the above is true for Texas. It’s true that there are special provisions for any cash-out transaction in the state. Before ruling out any potential options, I would recommend speaking with one of our Home Loan Experts because it’s also the case that lenders sometimes have different policies. You can reach us at (888) 980-6716. Good luck!

      Thanks,
      Kevin

  11. I just chatted with someone about this from quicken loans. He was not familiar with this but looked it up. There really is no specialist who knows about this type of loan or someone who has successfully done this to talk to? It seems like a great opportunity but a lot of unknowns about it.

    1. Hi Janine:

      We definitely do the loans. There are some special requirements and they can only be conventional loans, but they can be done. I’m going to get this over to our client relations team to help get things straightened out for you.

      Thanks,
      Kevin Graham

    1. It still exists, Marques! Probably the best way to get started is to talk to one of our Home Loan Experts at (888) 980-6716 and we can get you started on the right foot.

      Thanks,
      Kevin

      1. I just spoke to someone from Quicken Loans at (800) 251-9080. I asked if you offer delayed financing, and his question was whether i’m looking to make a home purchase.??? Obviously he has no idea what I was asking. When telling him I”m looking to finance my already purchased home, he told me “We do not do that”.

        So what’s the story???

        1. Hi Jason:

          I’m going to get this to our Client Relations team because while there are some specific requirements that must be met, we do offer delayed financing. I’m sorry you’ve had this experience. Someone will be reaching out.

  12. With delayed financing, what’s the max percentage loan on a duplex? And is it according to the purchase price or appraisal?

    1. Hi Julie:

      The maximum loan percentage is 85%, meaning a 15% down payment. It’s based on the purchase price unless the appraisal comes in lower. No matter what, no wonder can loan you more than the house appraises for. Hope this helps!

        1. Hi Bernard:

          You’re correct that in this specific instance, it would be based on the purchase price unless the appraisal was lower. I’ve edited my original comment as I misspoke. Thanks for the eyes and have a wonderful day!

          Thanks,
          Kevin Graham

          1. Hi Kevin,

            I’ve been speaking with a Quicken rep for a couple days about delayed financing on a single family investment home I am purchasing in cash (in NY). Given the cash purchase, I’m getting the house for below market value. Other lenders I’ve spoken to have said that they will use the appraised value regardless of the purchase price because the appraisal is the true measure of the home’s value, but my Quicken rep has stated that the loan will be based on the lesser of the purchase price or appraised value. So even if the appraised value is $20k more than the purchase price, we still have to use the purchase price…unless I wait the 6 months of course.

            Can you provide some insight? Has Quicken changed their policy since your post above? Thanks!

          2. Hi Carson:

            I can’t speak for other lenders and their policies. However, I’ve just checked the guidelines again for delayed financing. We base the loan amount on the purchase price, closing costs and any prepaid points and fees that may exist. Thanks!

  13. I am getting ready to cash purchase a home and would like to know more about this product such as interest rates and loan fees.

    1. Hi Kelly:

      It’s a regular loan, so there are no special interest rate guidelines. When it comes to interest rates and loan fees, every loan is different based on individual situations. I’m going to recommend you speak with one of our Home Loan Experts by calling (888) 980-6716.

      Thanks,
      Kevin Graham

    1. Hi Steve:

      It’s considered a cash-out refinance for whatever type of property is being purchased, primary, secondary or investment.

      Thanks,
      Kevin Graham

    1. Hi Kim:

      We don’t really have a minimum loan amount except in Alaska where the minimum is $25,000. However, a lot of times when the loan is under $30,000, it can be hard to make the cost make sense for the client. That said, you can do this. I’m going to recommend you give us a call at (888) 980-6716.

  14. Filled out the form and someone called me first thing the following, rep named Derrick… I was asking about specifically about delayed finance and he had no clue what I was talking about. He said Quicken requires the title to season 6mo. I asked him if I could talk to a senior rep…he said he was the senior guy. Asked how long he’s been doing this, he said 3 years. Great article, it’s just what I need, but per your own people you can’t do it. Smh…

    1. Hi Fred:

      I’m sorry you had this experience. We absolutely do delayed financing on conventional loans from Fannie Mae and Freddie Mac. I’m going to make sure I get this over to our Client Relations Team to get this straightened out.

      Thanks,
      Kevin Graham

      1. Hi Kevin,
        My wife called to check on “delayed financing” and was told there was no option other than to wait six months for title seasoning. When she explained about this article, she was told again there was no way. She hung up and moved on. Is there a secret number or form we should be filling out? Thanks.

        1. Hi John:

          If it’s a conventional loan, it’s possible to do delayed financing. There are conditions to this as there are with any mortgage. We do these loans, though. I’m going to get this to our client relations team to look into this and get you back on track. I’m sorry about this, and thanks for reaching out.

          Kevin Graham

  15. I’m buying a a family home with cash as a primary residence. I would like more information on delayed financing.

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