Paying cash and then refinancing into 30 years fixed. Possible? Pros/cons?

[Sartaj G.]

Hi all,

I am new to RE investing and recently bought a few SFHs from the same builder. I realized that builder gave many more incentives when I paid cash vs when I used an outside lender (builder’s price with their lender was much higher). I was wondering if I am in this situation again, can I pay cash (I have the liquidity) and then refinance after closing? My RE agent said it will not be possible but I have seen people mentioning this on the forum. If it is possible then what will be the pros and cons. I think there will be some additional cost to do refi and reissue of title policy.  How much that should run? Any other thing I am missing? 

[Jay Hurst]

Quote from @Sartaj G.:

Hi all,

I am new to RE investing and recently bought a few SFHs from the same builder. I realized that builder gave many more incentives when I paid cash vs when I used an outside lender (builder’s price with their lender was much higher). I was wondering if I am in this situation again, can I pay cash (I have the liquidity) and then refinance after closing? My RE agent said it will not be possible but I have seen people mentioning this on the forum. If it is possible then what will be the pros and cons. I think there will be some additional cost to do refi and reissue of title policy.  How much that should run? Any other thing I am missing? 

 @Sartaj G.  yes, you can. It is called delayed financing. We do it often. You will just be capped at the price you paid for the property as your loan amount (which is not typically an issue unless you are buying well below market value.) so, if you can truly get a better deal on the property by paying cash it can make perfect sense. (and do not listen the average agent on financing options!)