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The Sneaky Mortgage Technique That All-Cash Home Buyers Use

By Dan Green

A weaker-than-expected jobs report pushes current mortgage rates to a two-month low; today’s mortgage rates for conforming, USDA, VA, FHA, and jumbo home loans; and, the mortgage technique all-cash buyers use to get their money back from their homes.

April Jobs Report Helps Mortgage Rates

Non-Farm Payrolls chart (March 2017 - March 2018)
Non-Farm Payrolls chart

Mortgage rates moved lower to start the month last week, capped by Friday’s release of the Non-Farm Payrolls report.

Also known as “The Jobs Report”, the Bureau of Labor Statistics (BLS) Non-Farm Payrolls data shows 103,000 people entering the U.S. workforce last month, which is a good sign for the domestic economy overall.

However, the March 2018 jobs report is weak as compared to recent data.

Employers added fewer workers to payrolls in March than during any period in the last six months, and wage growth among employees is slowing nationwide.

Wall Street gets nervous when data weakens like this, and the Non-Farm Payrolls report fell short of expectation.

The news sparked a bout of safe haven buying.

Also known as a “flight to quality” , safe haven buying is when investors hedge bets by moving money away from riskier assets such as stocks, and toward safer assets, such as bonds.

This includes mortgage-backed bonds, which are the basis for how mortgage rates get made.

So, the jobs data, although not terrible, was just weak enough to make mortgage rates drop for buyers of homes and refinancing households.

Today’s Mortgage Rates

5-Day Mortgage Rate Trend / April 9, 2018
5-Day Mortgage Rate Trend

Good news for buyers who went into contract for a home this past weekend: mortgage rates are down today.

Rates for conforming mortgages, FHA mortgages, USDA mortgages, jumbo mortgages, and VA mortgages are lower as compared to Friday, which means that mortgage payments on your future home are now less expensive.

Or, it can also mean that for the same-sized payment you’re ready to pay, you can afford “more home” for your dollar. This onlineĀ mortgage calculator will do your math.

Remember that mortgage rates are different from everybody, so the quote you get from a lender will depend on your credit score, your loan size, and the state in which live; and, about a dozen other traits.

The lender from which you get your loan will matter, too, because rates vary between mortgage companies. Talk to two or more of them to find your preferred combination of service, rate, and cost.

Aggressive Mortgage Rate Quotes

Click To Get One!

Cash Buyers Using Delayed Financing To Cash-Out On Their Homes

April 2018 Non-Farm Payrolls Report
April 2018 Non-Farm Payrolls Report

According to data from the National Association of REALTORSĀ®, the number of all-cash deals for real estate is climbing.

The real estate trade group reports that 24 percent of existing homes purchased in February 2018 were bought with cash, the highest percentage of homes sold without a mortgage in the last twelve months.

But, not every cash buyer leaves its cash tied up the house; invested in real estate.

It’s common for cash buyers of homes to use a mortgage technique called Delayed Financing to get their cash back within six months of their closing.

With delayed financing, you pay cash for a home today, then do a cash-out refinance with a lender within six months of closing to get your cash back.

After six months, delayed financing is no longer available, per mortgage guidelines.

Delayed financing is most common among real estate investors and home flippers, but it’s a mortgage technique that anyone can use.

For more on delayed financing and getting approved, connect with a mortgage lender now.

Written by Dan Green

Dan Green is a mortgage lending expert and the founder of Growella. Prior to Growella, Dan was a six-time, top-producing loan officer; and, ranked repeatedly among the top 1% of loan officers nationwide. Dan's home buying expertise has been in print and on TV with The Wall Street Journal, NPR, Forbes, CNBC, and others.

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