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If you can buy a home with cash you are in the minority and are in an advantageous position for bargaining. There are many benefits of buying a home with cash and few drawbacks, but you should consider both before deciding how to finance your home purchase.
Bargaining Power
Most prospective buyers will have to finance their purchase with a mortgage. That means there is always a chance that their financing will fall through. Sellers want to know the money is there and that they have a guaranteed sale.
Faster Closing
If you pay for a house with cash, you can usually close in a few days, as long as the title is clear, as opposed to at least 30 days with a mortgage.
Not Subject to Appraisal
When you pay cash for a house, you and the seller decide on a fair price. If you have to obtain financing, the bank will require an appraisal and will cap the mortgage at the appraised price.
No Interest
Interest can double or triple the amount you pay for your house over 30 years. If you pay cash for your house, you pay the purchase price and no more.
No Mortgage Payment
When you pay cash for a house, you free yourself from a mortgage payment. That allows you to find other uses for a large chunk of your income each month.
Source:
The Wall Street Journal: Why Paying Cash Isn't Always Wise; Terri Cullen
FinancialWeb.com: Should You Buy with Cash or with a Mortgage?
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