Should You Buy a House With Cash?

In today’s competitive real estate market, homebuyers look for ways to go one up on the competition when putting an offer for their desired house. Using Cash as a method of purchase is a great way to fast-track the buying process. The seller is more likely to accept the offer, and homebuyers can skip all the tedious and lengthy loan processes that take a lot of time and be the owner of a house much faster.

But is paying Cash the best way? In this article, we will explore the reasons why buyers should and shouldn’t buy a house in Corpus Christi, Tx with Cash.

Reason to buy a house with Cash

1. More Chances of Winning the House

When buyers have several offers to purchase the house, you have increased chances of getting your offer accepted when you make an offer in Cash. Even if your financial situation is not up to standard, because you are paying with Cash, this may improve your chance of selecting your offer above others.

2. Speedy Process of Purchase

Making a cash purchase means that the home buyer does not have to wait for loan approval to come through before completing the sale. This also means that you will have much less legal processes and paperwork to do and have your offer accepted faster, which will save you time and money.

3. Eliminate Mortgage Insurance

When a buyer pays for a house using Cash, the lender will not require mortgage insurance. This will save you from spending more money on something that you don’t have to. Mortgage insurance is usually required when making a loan purchase, and the cost of it can be expensive depending on your age and credit score score.

4. Waive off Appraisal Fees

Sellers are usually advised to get an appraisal done on their house before putting it up for sale. This process is done by a 3rd party company that inspects the value of the house, and this is normally free of charge if you use a loan to purchase the home. By paying cash for your house, you will not have to pay this fee which saves you more money.

Get a Discount

When the homeowners in Corpus Christi are keen and in a hurry to sell houses for cash, they either approach direct buyers with the tagline “we buy houses for cash” or cut down their asking price for buyers that pay in cash. This is because the seller will get hold of the money immediately and does not have to wait for it to be processed through a loan which can take days, weeks, or even months.

Save More

You will be able to save on closing costs and real estate agent commissions when you pay Cash for your house. This depends on the amount of money that you put down upfront, depending on how much commission is required by the seller.

Building Wealth

You will be able to build your personal net worth faster when you purchase a house with Cash. With no mortgage, property taxes, and other property fees to pay, you will be able to save money faster, which can accumulate over time.

Ownership

You will be the legitimate owner of your house when you purchase it using Cash. This means that no bank or any financial institution can go ahead and take away your home because you have not been able to keep up with your loan repayments.

Resell with More Profit

Because the house is free of any debt, you will have more room to negotiate when it comes time to resell the house. With no mortgage to pay, you will be able to sell your home for a much higher price which would offer you a great return on investment if you decide to buy another house.

Reason to not buy a house with Cash

Unstable Source of Income

Paying for a home using Cash can be risky if you are not able to maintain your regular source of income. This means that you may have to take out a loan in the future if your financial situation changes for the worse, which could mean interest payments and late fees, which can pile into a big chunk going out from your pocket.

Seller’s Market

If the housing market is not in your favor, you might miss out on some great deals because of cash offers. If you are able to take out a loan, then you are more likely to have room to negotiate with the seller if their house has been on the market for a long period of time without having it sold.

Left with no Emergency Funds

When you buy houses for cash, there is no breathing room left for any emergencies that may arise. You will need to store away enough money for medical and other bills and also be able to pay the monthly home expenses like repairs and maintenance costs as well as property taxes, among other fees.

If you have used all your Cash to purchase a house, then the chances are that you have nothing put aside to cover any emergency expenses. You should not consider buying a house with Cash if you don’t have an emergency fund set up, as this can be a huge problem in the future when something goes wrong and you need money.

A Longer Wait to Own a House

If a cash offer is the only option that you want to use to buy a house, but you do not have enough money to cover the entire value of the house, then you will have to wait for several years before you can own it. You will need to work extra hard and save enough for a down payment so that when the opportunity comes up again, you are ready to take advantage of it and do not miss out on buying your dream house.

Also, while you were saving, the rents you paid for your extra years may not offset the appreciation of that value.

If you Want Big Return

If you have the power to put up 20% cash for a house, then you should consider buying stocks or mutual funds instead. The return on investment will be much higher rather than spending your money on a home that is not guaranteed to appreciate in value. There has to be some sort of certainty about the return in order for it to be worth investing in.

When is it a Good Idea to Pay Cash for your Dream House?

When you have saved up enough so that you will be able to pay for a down payment and the remaining balance in cash, when you want to live in the house for a very long time and not plan on reselling it anytime soon, you also need to know for sure that the value of the house will appreciate over time because this is quite risky when it comes to real estate investments. If you do not want any form of debt, then buying a house with cash is the only option that you have.

Conclusion

Buy a house in Corpus Christi, Tx, with Cash, depends totally on your requirements, your financial situation, and the property you are looking to buy. If it is guaranteed that you will make a profit when reselling a home in time, then it would be a good idea to buy with Cash. However, if there are no guarantees or room for negotiation because of the price difference or market value, don’t use cash offers when buying a house.