Cash is king … especially when you can get to it

In today’s housing market, who wouldn’t pay cash for a new home if they could? Prices are affordable, there are plenty of homes to choose from, and, perhaps more importantly, you don’t have to go through the stringent lending process. Plus, investing in a home with growth potential can be more appealing than riskier options that are out there.

While it’s hard to believe in the midst of our tough economic times, many people are doing just that – paying hard-cold cash for a home. Whether it’s an investor with access and resources to money, first-time buyers getting help from family, or equity-rich homeowners realizing a windfall after selling, many of today’s homes sales are paid for with cash.

The downside to this in the past has been the requirements in applying for a cash-out loan, including a waiting period of six months after purchasing a home. You had to wait six months before you could even apply. Just recently, however, Fannie Mae suspended this requirement making it quick and easy to get up to 70% of what you paid for the home back out in cash to pay yourself back or invest again.

This is great news! Let’s say you recently made an all-cash purchase, and you decide you want to diversify your money in other investments, buy another great-priced home to become a landlord, or simply need the money for personal needs. If you didn’t finance any portion of your home purchase, you can apply for a conventional loan to get your money out. Plus, you can add on the processing costs to your loan (fees, points, and closing costs) which have been reduced since April 1, 2011.

The timing of this new cash-out program is an added bonus. There are reports coming out indicating signs of an economic recovery the second half of 2011. If that holds true, interest rates and home prices will start to go up as well as stocks and other investments. Now is the time for many to leverage their money to realize the best possible gain down the road. And to do that, it takes cash.

As lending brokers, we understand and appreciate the value of “cash is king.” We have a variety of programs and resources to help to you get your hands on it – quickly. The only wait is if you hesitate to pick up the phone.