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I have been seeing a number of all cash deals in the area that I am interested in. What I hear is sometimes the seller would choose the buyer with a cash offer even if the offer price is a little lower.
Say i am looking at house costing $750K.
A) I could get the 20% down from parents in the form of a gift and finance the rest.
B) I borrow $750K from parents to buy the house and then finance the house for 80% and return that 80% back to parents
Would the loan quantum and interest rate be different for both scenarios? This will be my first home/residence
Thanks
@Anonymous wrote:I have been seeing a number of all cash deals in the area that I am interested in. What I hear is sometimes the seller would choose the buyer with a cash offer even if the offer price is a little lower.
Say i am looking at house costing $750K.
A) I could get the 20% down from parents in the form of a gift and finance the rest.
B) I borrow $750K from parents to buy the house and then finance the house for 80% and return that 80% back to parents
Would the loan quantum and interest rate be different for both scenarios? This will be my first home/residence
Thanks
^^^Yes, the LTV and interest rate is different for a cash out "refi" than a purchase.
Ask your LO to compare the two. Each lender has different guidelines. Since you would only refi to 80% it is possible your lender will do that after X months of ownership. You have to ask your lender how soon you can cash out of your purchase.
Some sellers give a discount to cash buyers - this is definately a negotiable area. Some sellers don't care that you are cash.