Home Buying in Wisconsin>Question Details

Jvinicky, Home Buyer in Pittsburgh, PA

What advantages/disadvantages are there to paying cash for a house?

Asked by Jvinicky, Pittsburgh, PA Mon Jun 24, 2013

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Answers

2
Advantages

1. you'll get to go to the head of the line when buying a home (assuming all terms and numbers are equal to other bidders)

2. No drawn out mortgage approval period of time.....no appraisal needed.....no last minute glitches with the mortgage...less paperwork and headaches

3. no additional fees associated with obtaining a loan

Disadvantages:

None that I can see
0 votes Thank Flag Link Mon Jun 24, 2013
Aside from the impact on seller when he gets your offer, a cash purchase can save you over $1,000 just in cost of obtaining a loan. You won't have to pay for credit reports, flood verification, appraisal, escrow fees, etc.
Then again, you may want to pay for some of those items anyway just so you're in the know.
Probably the biggest advantage is the interest cost you'll save. Even though interest rates are exceptionally low right now, they can still cost you much more than you'll earn on interest if you put your money in a savings or money market account... maybe!
Since rates are bound to increase sometime in the future, you might be able to make out better if you take out a mortgage now and then invest your cash for a higher rate in the future. Do you want to gamble on that?
0 votes Thank Flag Link Mon Jun 24, 2013
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