http://www.businessinsider.com/real-estate-delayed-financing-rule-2012-11
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That's how wealthy house hunters and real estate investors in coastal markets like New York and San Francisco have learned to cope with increasing competition. MarketWatch's AnnaMaria Andriotis reports:
"It’s called delayed financing, in which buyers pay cash for a home and then take out a mortgage soon after closing. Rarely used even two years ago, experts say it has picked up over the past 12 months....
After the deal is done, these buyers also want to regain some liquidity. So they get a mortgage and, in some cases, stash this money in investments that might have higher returns than what they pay in mortgage interest. Other options: They might use it to purchase another property or to simply bolster their cash cushion."
The strategy has gained traction since 2011, when Fannie Mae eliminated the six-month waiting period preventing new homebuyers from taking "cash out" on homes immediately after borrowing.
Read more:
http://www.businessinsider.com/real-estate-delayed-financing-rule-2012-11#ixzz2C6dBPCRR
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