We have all heard the phrase “cash is king,” and it holds especially true in today’s seller-driven real estate market. Some will pay cash because they don’t want or can’t afford a mortgage, while others do so because the property is not financeable. In many cases, however, it’s because mortgage rates have risen to a point that buyers’ assets wouldn’t gain a higher return — so people figure they might as well use cash.
Rates have been moving downward, and while paying all cash for a property may have made sense even a few months ago, the landscape may now offer something different. Your clients may be able to take advantage of this, even if they are already closed. At Key Mortgage, we can help your client obtain more advantageous terms through our process called delayed financing refinance. This program can help clients reclaim a portion of their cash investment in the property and take advantage of today’s lower mortgage rates. So you ask, why might someone want to do this? There are a few reasons.
1. They want bigger returns. Mortgage rates have dropped in the past few weeks. From the highs of the mid 7% range, we are now touching on the mid to low 6% range — redeploying cash back into another financial vehicle may get them a greater return.
2. They want a lower monthly payment. Lower rates mean lower payments. Maybe they paid in cash because the monthly payment was too high. With rates coming down, having a mortgage they can manage makes financial sense.
3. Their mortgage qualification picture has improved. Perhaps they are now in a better position to qualify for a mortgage, or they may come to find out that they were in a good position all along.
4. They want their offer to have an advantage in a competitive market. Like having your cake and eating it too, you can win out of multiple offers, but still take advantage of redeploying their cash into higher-yielding assets than their home.
The key component to making this work is that the buyer completes this delayed financing refinance within the first six months of purchasing the home. The great news is that even if your client purchased more than six months ago, we still have options to help them leverage their equity and put it back to work. Having your Key Mortgage loan officer provide that consultative conversation with your client is key to making this all work, and having that mortgage partner that is integrated into your team can be your differentiator in the eyes of your clients while putting them in a position to achieve their real estate goals. Let your Key Mortgage partnership be your winning difference!
Still struggling to find that Key Mortgage loan officer that is right for you? Just have a conversation with your managing broker. They can connect you with someone today.