There are a lot of reasons to forego financing and to pay for a new home in cash if you have enough funds available. While getting financed might allow you to have more cash available to you in your bank account, the drawbacks of financing are many.
The following are six good reason to pay for a home in cash rather than heading to the bank for a mortgage loan if you're looking to buy a new house:
Sellers will be more eager to work with you than they are to work with buyers who are being financed.
If a buyer has to secure a loan before being able to close on a house, it's less convenient for the seller. Sellers know that financing sometimes falls through for buyers.
You'll find sellers of new homes much more eager to negotiate with you if they know that you're not relying on financing to buy the home in question.
Closing on a home is easier
If you're buying a newly constructed home from a builder or another type of seller, closing can be a headache.
However, things are a little easier if you can pay in cash. First of all, you can avoid added costs like appraisal costs and loan origination charges. You'll probably also have a lot less paperwork to deal with at closing if there is no lender involved.
You don't have to worry about falling into an upside down mortgage because of changing market values.
Real estate market fluctuations are very unpredictable. They can put homeowners in the unpleasant situation of an upside down mortgage where there is more money owed on a home than the home is actually worth.
If you pay in cash, there is less uncertainty, and you know exactly what you're getting into when you buy the home.
You can always take out a home equity loan down the road if you need cash.
Perhaps you're dissuaded from paying for a home in cash because you're worried that you might need the cash before long to make another purchase.
Remember that you can always take out a home equity loan once you own the home if you need cash available for another purchase. Deciding to pay in cash doesn't in any way force you to remain deprived of the cash for years to come.
You won't have to make a mortgage payment.
A mortgage payment makes budgeting for every month more complicated and is another thing to remember. Pay in cash and you can enjoy more of your monthly income rather than having to allocate it to a mortgage payment.Share
26 January 2017
If you’re looking for a fun way to improve your home and boost your property values, you may want to consider adding a pool to your backyard this summer. You’d be surprised how big a difference this simple addition can make to your home and for your property values. A new pool is a big project however, so you’ll have to do some research before putting one in. I created this blog to help you with that research. Check out different pool construction options, as well as maintenance tips and the accessories that you have to have this summer.