cancel
Showing results for 
Search instead for 
Did you mean: 

Paying Cash then take loan from bank

tag
Anonymous
Not applicable

Paying Cash then take loan from bank

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 

 

 

Message 1 of 2
1 REPLY 1
StartingOver10
Moderator Emerita

Re: Paying Cash then take loan from bank


@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. 

Message 2 of 2
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.