I have been working closely with a lender on the purchase of a home. What we ended up doing was making a cash offer on a property. What we now want to do is get a mortgage right after closing, as we will be rehabbing the property.

The lender is telling us we can't even apply for a mortgage until after the cash closing, and that financing will take about 45 days.

The lender was very helpful when considering other properties (which would not have been cash offers with rehab/cash out financing). However I'm not sure she is that much of an expert on the "cash out" financing we're after.

Is she correct in that you generally can't even apply until the cash transaction is complete? Is 45 days reasonable to complete the financing?

  • I am not sure why you are doing it this way. Will the new mortgage just cover the cost of the rehab or will it cover the purchase price and the rehab? – mhoran_psprep Aug 9 '13 at 17:21
  • Why did you do it this way? Wouldn't it have been better to take out the mortgage at purchase time? You could still have made an unconditional 'cash offer' and only used the cash if the mortgage fell through. – DJClayworth Aug 9 '13 at 17:26
  • @mhoran_psprep faster closing? On a sellers' market cash offers take precedence. It sounds like the OP is flipping, using cash-out refi after a cash-all purchase is not unheard of in this scenario. – littleadv Aug 9 '13 at 17:26
  • yes, it was a multiple offer situation, and the cash offer made the difference. We are not flipping, but buying to rehab for our own use. I wasn't aware that doing a mortgage with cash as a backup was possible (probably too late now). – Phil Sandler Aug 9 '13 at 18:35
  • I just did a cash-out finance for an investment property and I WISH it only took 45 days. I blame Well's Fargo for a lot of incompetence in the process, but it took me almost 4 months. – JohnFx Aug 9 '13 at 21:24

Is she correct in that you generally can't even apply until the cash transaction is complete?

Probably. How can you commit to mortgage something you do not own? Makes sense for them to wait not even until the transaction is complete - but until the transaction is recorded.

Is 45 days reasonable to complete the financing?


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  • Thanks. It seemed surprising to me that they couldn't even start the application (paperwork, etc.) before the original deal was done. – Phil Sandler Aug 9 '13 at 18:38

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