You’d probably believe that paying a home completely by cash is better than taking out a pesky mortgage and having to deal with decades of monthly payments on top of your other expenses. But, there are a lot more considerations that you should contemplate when paying with cash versus through financing.
The Pros of Paying With Cash
By paying with cash, you’re eliminating the need to pay interest on the loan as well as the loan itself. You’ll also avoid any other additional fees that are associated with the mortgage such as lender fees. Additionally, cash purchases have the flexibility of closing faster and look far more attractive to a seller. On the seller’s end, there won’t have to worry about a buyer backing out due to their financing request being denied.
The Pros of Mortgages
You might already believe that paying with cash is by far the best option to go with when buying a home. As a matter of fact, choosing to go with financing through a mortgage can make sense as well. Even if a buyer had the necessary funds to pay for a home, it wouldn’t make sense to tie up all of it only to end up struggling later down the road. For cash buyers, the opportunity might be too good to give up and that can cost them if a home emergency were to occur, or a major repair is needed. It’s recommended that cash buyers leave themselves with a good amount of liquidity.