Newbie... does cash purchase delay a mortgage after rehab?

[Rachel A.]

Just getting started and learning how much I don't know.  I am hoping to buy my first property within the next couple of months, but I've gotten conflicting information about financing it.  I had planned on purchasing and rehabbing it outright in cash, but I heard an experienced investor say that you don't want to use your own cash to purchase a property because you have to own the property for a year before you can get a mortgage.  This doesn't make sense to me, and I'm not certain I heard/understood him correctly.  Is this true?  If so, can someone explain this to me.  Thanks.

[Christian Bors]

@Rachel A.  If you purchase the property with cash and then want to refinance the property most lenders typically require either 6 or 12 months "seasoning" period.  For commercial loans, there are no requirements, its at the banks discretionary.  However, based off your question, I am assuming you are looking for residential mortgage.  So in that case, most lenders will require at least 6 months of "seasoning" before you can refinance.  There are plenty of posts about this topic.  Just search, seasoning period and you will find plenty of posts.

Good luck,

CB