A mortgage is an amount owed, but is often considered a “good debt”, and a natural part of life. Combined with interest, home buyers ultimately pay more with a mortgage, but have the flexibility to pay the full, substantial purchase price of a home over time, instead of all at once. It can be a great way to build a great credit rating with the banks, especially for younger buyers. But cash has certain advantages too!
We’ve all heard the old adage, “cash is king”, while this has never been truer than in the case of Barrington real estate.
Here are a Few of the Top Advantages for Barrington Cash Buyers!
Simply put, having cash ready up front can save you money. This relates to both short-term and long-term savings.
Lenders will often charge various appraisal and other fees to assess buyers. Without the need for a lender, cash buyers can save money on several closing costs related to the mortgage as well.
In the long-term, home buyers paying with cash will save the amount charged in interest for any long-term loan. Those interest payments sure can build up over time.
Paying with cash can be extremely persuasive to sellers. Going into a multiple offer situation, a buyer with cash in hand can often gain the upper hand. Without having to worry about issues with securing funding or a lender backing out, cash can offer a welcome reassurance to sellers.
As a result of this, cash could potentially also lead to a lower overall sales price. A cash discount of sorts. A home owner may even be persuaded to close at a loss, even in favorable market conditions, for the speed and convenience offered by a cash sale.
A Quicker Sale
Any way you look at it, securing financing takes time. In some cases, securing a mortgage loan can take up to 45 days. Not everyone has the capital to manage a large purchase like real estate, but for those looking for a quick turn around, it’s the way to go!
There’s also the escrow period, where both buying and selling parties wait for requisite funding to change hands. With a cash sale, all parties involved can avoid this and the stress associated with it.
Get More From Future Home Equity Loans
When you apply for a home equity line of credit, lenders will typically determine how much to lend based on the amount of equity you have in your home. Naturally, if you’ve paid the full purchase price for your home up front, financial institutions will consider that full amount.
If you need it, you’ll likely be able to borrow up to 80% of your home’s total value in case of emergency, or if there are
some pressing home improvement issues that arise. Home buyers with a mortgage looking to borrow money based on their home’s equity early in the mortgage cycle will have much less equity to draw from.
Making a purchase as large as real estate with cash is certainly not for anyone. For the majority of the buying public, it isn’t realistic. But it does have certain advantages if you have the capital to undertake it.
Not sure which option is right for you? We encourage you to contact Corinne Guest online or call 1-847-363-3686 to find the best option for you!