But thats not all.
Take a good look at the following reasons to buy a house for cash.
You might find a few advantages you havent considered.
Our team has compiled alist of creative waysyou can fatten your bank account this week.
This is a long list, so dont get overwhelmed.
Well keep it updated as offers changes or expire.
Theres no definitive data.
Private sellers also prefer cash.
The loan may fall through for other reasons, too including things found during inspections.
Did you know?
There have been many reports aboutborrowing getting tougher due to higher lending standards.
But that wasnt our problem.
There are just so many hoops to jump through.
Getting a mortgageloan is a hassle.
3. you’re able to Close Faster
You typically close much faster when you offer cash.
This is one reason sellers like cash offers.
And you might find it nice to quickly move into your new home.
A recent survey found theaverage mortgage loan-closing timeis 37 days.
Even if you do, your interest rate can be much higher because of alow credit score.
When you pay cash for a home, credit problems are not an issue.
Even at 4%, a 30-year mortgage loan of $100,000 will cost you $70,786 in interest.
Itll more than double the cost of your home.
Prefer a visual representation?
These can include:
They can add up to thousands of dollars.
The first isprivate mortgage insurance(PMI), which many lenders require.
you might also reduce the cost of homeowners insurance when you pay cash.
We went without insurance when we owned a condo.
We were only able to do this because we paid cash, since almost alllenders require condo insurance.
Just thinkwhat you’re able to dowith the money that wouldve gone to monthly payments.
Theyre effectively trapped, unless theyre willing to walk away without paying.
Andthere are millions of these underwater mortgages.
You may not think this is relevant if you plan to buy a home with a healthy down payment.
Also, owing anything on your home can make it psychologically tougher to sell.
Youre Unlikely to Ever Lose Your House
Life happens.
Butno mortgage means no foreclosure by a lender.
you might also lose your home if youdeclare bankruptcy, but even thats not always the case.
InFloridaandTexas, you could go bankrupt and still keep your home even if its worth a million dollars.
Problems With Paying Cash
There are some drawbacks to paying cash for a home, though.
You still hold an asset of the same value whether or not you owe money on it.
Of course, if you oughta access your equity in the future, you could borrow against the home.
Or you might sell it.
Leverage is more important in true investments.
So unless you plan to split your money tobuy several rental homes, giving up leverage is irrelevant.
The Verdict
It all depends on your particular situation and goals.
But if you dont have a good reason to borrow, look again at the list above.
Of course, the biggest reason you might have for not paying cash is that you simply cant.
Well tackle that issue in an upcoming post.
Your Turn: Would you prefer to pay cash for a home instead of borrowing?
Disclosure: We dont hesitate to pick pennies off the sidewalk when we spot them.
But the affiliate links in this post help our earnings grow even quicker.
Plus, its a lot cleaner than sidewalk money.
Steve Gillman is the author of 101 Weird Ways to Make Money and creator of EveryWayToMakeMoney.com.
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