Delayed Financing Cash Out

[Corby Goade]

I recently bought a duplex with cash from my HELOC, and am looking to cash out the property to pay off my HELOC and do it all over again. It's been four months since closing, so I have two months to go before the property is seasoned and am exploring the Fannie Mae Delayed Financing option.

Has anyone else done this? The quotes I've recieved in the last couple days are around 5-5.25%, is that the going rate for this product? Is there a rate premium on delayed financing, or am I getting the same rate I would for a seasoned non-owner occupied cash out? Thanks in advance!

[Stephanie Medellin]

Rates should be the same as if you were doing a regular cash out refinance. You can do delayed financing before 6 months to pay off the HELOC assuming it was on another property. You could also wait until after 6 months and then it wouldn't be delayed financing, it would just be a regular cash out refinance, but there shouldn't be a difference in the rate.

If you have excellent credit, 5-5.25% is quite high unless you're trying to cover your closing costs with a lender credit.  If you're closer to a 620 credit score, that might be about right.