Home Buying in Philadelphia>Question Details

jalberto, Home Buyer in Philadelphia, PA

First time buyer benefits?

Asked by jalberto, Philadelphia, PA Mon Oct 10, 2011

What kind of benefits would i receive as a first time home buyer if i were to purchase a property with cash, not a mortgage?

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Interest rates are so low now that the old addage "OPM" or Other People's Money rings very true. You may be better off holding on to your cash and financing the purchase with rates hovering around 4%. You will also get the mortgage interest write off.

Good luck and congratulations on being in such an enviable position!

Barbara Smith
Weichert Realtors
Licensed in NJ & PA
Cell/Text: 609-980-7593
Web Reference: http://www.BarbSellsSJ.com
1 vote Thank Flag Link Mon Oct 10, 2011

One of the great benefits of buying with cash is that there are no mortgage contingencies, and this may help influence the seller to accept a lower offer. Please let me know if you have any questions. 215-840-8019
1 vote Thank Flag Link Mon Oct 10, 2011

You would receive the benefit of being a home owner instead of a renter. You will have an investment. You will get a tax break and you won't be paying someone else's mortgage.

Renee Porsia
Associate Broker
(215) 669-0589 Direct
(215) 358-1100 Office (ask for Renee)
Proudly servicing all of Philadelphia, Bucks & Montgomery Counties for over 11 years now. "if you used another Realtor, you probably paid too much."â„¢
1 vote Thank Flag Link Mon Oct 10, 2011
None really, first time benefits are more in the form of a lower required down payment, lower interest rate and mortage deduction from taxes. You will however start building equity for the future. For tax benefits you wuld need to talk to the perosn who completes your taxes and or a loan officer.
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Mon Oct 10, 2011
you may qualify for a grant depeding on the area...try cwaters@uac.org
0 votes Thank Flag Link Tue Nov 15, 2011
The rate of a 30 year mortgage is now at 4%. A first time buyer can now buy an averaged price home and pay substantially less than rent. You are also building cash equity in your home that may be used in the future.
These prices are lower than the interest rates of the 1960's. This will probably not happen again for another 50 years. Take advantage of the great buys and interest rates now.
0 votes Thank Flag Link Mon Oct 10, 2011
Hello Jalberto,

As Always CASH IS KING..... you can still Negotiate with the use of our Years of Skills and Talent.

Call me if you would like us to Cover your ASSETS...

All the best, John Curci 215-757-2889
Web Reference: http://www.HomeCatch.com
0 votes Thank Flag Link Mon Oct 10, 2011
Hi, jalberto.

Honestly, your biggest benefit will be that you are looking to buy a home in an environment that is being called one of the best times to buy in US history!

If you're paying cash, that will give you even more flexibility with your offers; sellers love buyers who pay with cash. Let me know what area you are interested in and I'll help you get started.

If you have any other questions, please don't hesitate to reach out.


Timothy Garrity | Realtor & Consultant
Licensed Real Estate Salesperson - #RS314897
215-829-8850 Office
267-879-2716 Mobile
0 votes Thank Flag Link Mon Oct 10, 2011
I don't necessarily agree that a cash offer will get you a lower price. May be so with a short sale or foreclosure. At the end of the day, dollar for dollar of the purchase price goes into the seller's pocket. The buyer gets to finance that same dollar for 30 years at a very low interest rate. With a quality pre-approval the seller does not necessarily care who is putting up the money. I advise many of my sellers to double check the pre-approval with one of our mortgage reps to make sure the buyers can obtain a mortgage. After that, the highest price usually wins.

An additional benefit to financing would be the appraisal. Most "fall-throughs", or deals that went to contract but didn't close do so because of a low appraisal in this market. If you apply for a mortgage and the appraisal comes in low, you have the opportunity to negotiate a lower sales price. The sellers may not accept, but you'll have a professional appraisal backing you up.

Barbara Smith
Weichert Realtors
Licensed in NJ & PA
Cell/Text: 609-980-7593
Web Reference: http://BarbSellsSJ.com
0 votes Thank Flag Link Mon Oct 10, 2011
Buying with cash will get you a decent discount and an accepted offer when dealing directly with the seller - but buying with cash actually has no other additional benefits. In fact, in this economy, you should think long and hard about tieing up your cash in a property when you could be using that money - to make other money.

Buy a house for $100,000 cash to live in.
Benefit: have no mortgage payment, get a discounted purchase price, get offer accepted quicker by the seller vs. someone who makes an offer for the same house but is not buying cash.

Disadvantage: The cost of "lost opportunity" your cash is tied up - so you can no longer use that cash to invest in other investment vehicles such as gold, silver, stocks, etc. You could also be lending your cash out to investors for a 10% interest return, or with say $80,000 cash - have enough to invest in 3 or 4 rental properties that bring in $400 to $500/month per property cash flow. So in other words, put 3%, 5%, 10% or 20% down on that first-home purchase - and have $80K to $90K available to invest in other things that could bring in $$2,000/mo income! Plus, have money available for other emergencies or urgent issues where you need cash.

There are special first-time home-buyer mortgage programs out there that have different benefits depending on the location of the home, and the program you choose. Some first time programs require 0 down payment, (USDA Loans) - and there are all kinds of first-time programs available - feel free to call or email me for more info or to discuss.
disclosure: I am not a financial advisor or an attorney - just offering my opinion.
0 votes Thank Flag Link Mon Oct 10, 2011
What kind of benefits are you looking for as a cash buyer? What are the intentions of the property?

Carl Caldas
Web Reference: http://thinkcityspace.com
0 votes Thank Flag Link Mon Oct 10, 2011

You really need to analyze your financial picture and determine if purchasing a property is beneficial to you in terms of investment and tax write offs. That being said, with the interest rates as low as they are at present, it may be more fiscally savvy for you to get the mortgage. Looking at the pros and cons for each individual property may impact your perspective and outcomes.

Being a first time buyer with cash vs. a mortgage might not reap you the rewards you are seeking, have you had a mortgage broker analyze your financial picture and provide you with direction? If you are interested in speaking with reputable brokers please feel free to send me an email and I will provide you with an excellent array of lenders with whom to speak. Email me anytime at : anabarlow@gmail.com
Ana Barlow, Coldwell Banker Preferred, Philadelphia
0 votes Thank Flag Link Mon Oct 10, 2011
I agree with the below answer, but if you're interested in buying, there are some great opportunities to get some great deals. Give me a call if you're interested in seeing what kind of deals are out there. I could set you up with some links to view properties that would fit your criteria online.
0 votes Thank Flag Link Mon Oct 10, 2011
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