buying w cash is the best in these short sale/REO days, if that's what you're doing...buying a distressed property. However, if you earn income, and this is your primary home, there are more tax advantages to having a mortgage (all your interest and closing costs can be deducted from you income, saving taxes paid).

In these days when FHA has great terms, and when rates are low, if you have good credit and can document income, it's good to put 20-30% down and have a mortgage... However, if you're income is not documented, I can understand buying w cash, or if buying w cash is "such a deal"...

Escrow means that when you get a mortgage, the lender will require you to put money aside, in an escrow account, to save for the real estate taxes and insurance...they add this amount to your principal & interest payments, so that your monthly is higher, but you're not stressed, at the end of the year, trying to come up with the whole amount. Of course, if you are fiscally disciplined, you can put that money aside, on your own, and earn interest in a short term cd:) or a money market acct.

Have you contracted already? Have you gotten a comparative analysis of closed sales near your property? have you had someone research the history, liens, title on the property? These are all recommended.

p.s. you might want to check out our website to see other properties that are bank-owned, if you're dealing with cash.. http://.www.hammerandhammerrealtygroup.com

At closing, they will pro-rate your taxes fr April - end of Dec. 2009, and put that in escrow to pay your taxes. Or, they will credit Jan-April 2009 to you, at closing, for you to pay the 2009 tax bill by end of Nov/Dec...you can pay interest and pay until 3/31/2010. It depends on how your lender requires it, and how your mortgage product/title co. structures it...whether you have your tax/insurance in escrow or not...

Where and what kind of property are you purchasing? If you haven't found a property yet, you might want to check out our website: http://www.hammerandhammerrealtygroup.com. It's current, active listings that you can search by location, price, # of bedrooms, sq.ft., short sales, bank-owned, etc. Or, I can set up a customized search for you. I'm also a mortgage broker. I can pre-qualify you, and issue you a certificate, which helps in negotiations with the Seller. Let me know how I can help. Catherine Kim Owens P.A. 954-536-0648; cjkowens@aol.com