When making an offer to purchase a short sale or foreclosed home, if I make a cash offer, what it means is I am no longer attaching a financing contingency to the offer, but it does not mean I can't seek financing right?

If I made a cash offer, but also apply for financing, and for some reason the loan process got stuck somewhere (for whatever reason), and it does not come through in time, meanwhile the closing is going to happen as scheduled...so come closing day, I have to use my own cash to purchase the home. What if the loan come through one day AFTER closing, when I already paid for it, is there a way for that home to still be financed, or everything is null and void because it did not happen in time? and I would have to apply for a different kind of loan, like a equity line of credit or a refinance of the home just purchased?

Try to communicate the urgency to the Bank/Mortgage Company that you wish this to be an Original Purchase Money Mortgage, and impress upon them that it must be available for the Closing . . . . otherwise you'll be shopping around for a better deal immediately following the Closing (which will go on without them).

IF they want your business, they will be ready. It sounds like you have time to conduct that discussion well in advance . . . . so they shouldn't be rushed into committing to do something that they can't fulfill.

You want to preserve your Working Capital for the next deal, and have this process fit together like the workings of a fine watch. If they don't understand and can't help you do that, then you don't want them as your Lender anyway.

Here let me answer your question. If you paid cash for the home and closed then you can still obtain financing. It would be processed as a refinance instead of a purchase.

This does change your financing terms though. The loan would be processed as a cash out refinance. FHA limits you to 85% of the property value or in your case the purchase price since you would be refinancing within 1 year of the date of purchase. VA allows 100% however I do not know of an investor offering more than 90% at this time.

Vermont is right though. Even if you do not close on time an extension should be able to be negotiated.

[quote=Greg Phillips]Vermont is right though. Even if you do not close on time an extension should be able to be negotiated. [/quote]

and speaking of extensions.. get as much time to close as possible. If they want you to close in 30 days, ask for 50.. or whatever. You don't have to take the full time, but you have it if you need it.

If at all possible, it's obviously better to already have extra time built into the contract, than ask for it later.