Posted on: 27 January 2020
Having enough savings or proceeds from selling a different home to buy a new home with cash puts you in an enviable position. You will save significant money down the road by avoiding interest. Buying a home with cash can also come with other benefits, such as being a more appealing option to home sellers in a competitive market. While advantageous, buying a home with cash does come with some considerations and cautions. Here are three tips for buying a home with cash:
Make Sure You Have Enough Liquid Cash
In some cases, such as receiving a large windfall, you may technically have enough to pay for a home in cash but not enough liquid cash leftover to make it a wise decision. Remember, once your money is tied up in your home, you won't be able to access it easily. Most experts recommend having around six months' worth of expenses in savings. This will be enough to cover unexpected home expenses as well as emergencies such as car repairs. The key is to ensure you will still have at least this amount in savings after buying your home with cash.
Have an Inspection and Appraisal No Matter What
When buying a home with a mortgage loan, your lender will require you to have a formal inspection and appraisal of the home you're buying. When buying a home with cash, this requirement doesn't apply to you but it's important to complete these steps anyway. The appraisal and inspection will let you know that you aren't overpaying for your home and will also make you aware of any potential problems that will need to be addressed.
Expect a More Streamlined Process
When buying a home with cash, you should expect the entire process to go very quickly, often in a matter of days. For this reason, it's important to wait to make a cash offer on a home until you're truly ready to buy a home and part with your cash immediately. Loans take time to be processed, and home sellers are often faster to approve a cash offer simply because it makes things easier for them since it eliminates the risk of the financing falling through last minute. The more streamlined process can make buying a home very low-stress.
As you can see, buying a home with cash is a decision that should be carefully considered. Working with the right real estate agent and mortgage company will help make the process as stress-free as possible. Look online at a cash home buyer company to learn more.Share