It is everyone’s dream to own a house. However, homes do not come cheap. Very few have finances available to buy their desired house. Perhaps, you are among those who could afford and is ready to buy even without getting financial help from a mortgage company. Although you have found the house that you want and have enough funds, you are still undecided whether you should buy the house with cash or instead take advantage of the minimal interest offered by many loan creditors.
Here are five good reasons why paying all-cash is the smart move for you to make:
1. Makes you more attractive to a seller.
Home sellers prefer quick and smooth transaction. The entire thing gets more convenient on their part when you can offer to pay for their house in cash. Since the deal is not dependent upon a third-party financing, home sellers feel much more at ease as they don’t need to worry about a buyer backing out at the last-minute resulting from a mortgage loan application getting disapproved. For a seller who is restless to close the deal, he prefers what is known to be a “sure sale”. Additionally, an all-cash purchase simplifies the home-buying process which makes it possible to close the deal faster and in many cases this is appealing to a seller since the money gets into his pocket sooner.
2. Saves you money.
A buyer who is capable to close in cash are in many instances able to get a price drop due to the certainty of the sale. Second, no mortgage loans equals zero interest. Payment on loan interests accumulate into a huge amount of money and in most cases buyers end up paying nearly double or triple the sale price of the house. You save yourself from this more enormous cost when you opt to pay all-cash. Lastly, expenses usually tied to closing a mortgage are avoided. These are mortgage origination fees, appraisal charge, insurance coverage, attorney’s fee, and all other costs obligated by loan providers. When summed up this can mean significant saving in thousands of dollars.
3. Saves you time.
With all-cash purchase the home-buying process is streamlined. It saves you your valuable time since the need to get difficult papers and search for efficient and most useful loan service is eliminated. Additionally, you no longer have to wait around 45 days to close the acquisition . A cash home purchase allows you the flexibility of closing faster. As soon as the home inspection along with the other contingencies are completely satisfied, you will be able to close in as little as seven days. Generally speaking, this is favorable as well to home sellers as they prefer a brief, easy, and simple transaction. The shorter the process, the quicker they get the money .
4. Frees you from stress.
All-cash purchase, eliminates the hassles of paperwork including the inconveniences of necessary contingencies involved in getting a mortgage these days. But more important to that, when you pay all-cash for your house you get to enjoy more spendable income month to month given that there would be no need for you to set aside payment for a mortgage. This will give you more economic flexibility in budgeting your monthly earnings. Moreover, full ownership of the house at the outset bring about a sense of security. You have peace of mind as you never have to worry about losing your home to foreclosure when a misfortune happens such as job loss. Freeing yourself from financial stress is going to give you a more desirable sleep at night.
5. Allows you to immediately gain full equity in your new home.
When you pay cash outright, you right away gain full equity in the house. Given this, it will be easier for you to get a home equity loan and at a bigger amount since the creditor will base it on the equity you have built up in your home. Not only that, during a financial emergency you will be able to borrow up to about 80% of the house’s value.