The phrase “cash is king” is well-known, but when it comes to buying a house, will cash yield you the best deal? It might or it might not. Before you spend your hard-earned money, know the advantages and disadvantages of using it to buy your home.
Rewards of an all-cash purchase
Being the El Segundo real estate market is fast-moving and currently attracting lots of buyers, you’re probably in store for some competition. Paying in cash can come with some appealing benefits.
- Increase the probability of a fast-track deal and avoid bidding wars. A seller may quickly accept your cash offer because you demonstrate you’re a serious buyer. Without lenders to deal with, you decrease chances of the sale falling through, making motivated sellers more apt to accept your offer. In some instances, you may even be able to negotiate a discount to get the deal done fast.
- Simplify the buying process. With no need to wait for mortgage approval where things can go wrong (i.e. low credit scores or poor home appraisals), cash makes the deal more straightforward.
- Save money. By paying in cash you’ll save money on closing costs, title insurance, PMI expenses and, perhaps best of all, no mortgage interest payments.
- Have sole equity in your home. Once you pay for your home, any risk of a bank foreclosure disappears. If something changes in your financial status, you don’t have to worry about someone pushing you out of your home because you missed mortgage payments. Financial freedom at its best.
While the advantages of paying in cash might sound amazing, you’ll still want to examine the pitfalls.
Next – View the Risks of all-cash purchases.