With the recent mortgage bubbles still fresh in mind, no one can blame people who would wanna buy their next property in straight cash payment instead of going for loans. It sounds like a good idea, but here are its pros and cons if you are hesitant.
PROS Of Paying Cash In Home Buying
The feeling of complete home ownership is priceless. The pride, joy, and fulfillment will let you sleep well at night. There are many reasons why you don't wanna go for a a 30-year mortgage, but maybe the best reason is gaining full equity in your real estate property.
Cash will always be there to borrow in cases of emergency. Instead of paying mortgage regularly, you can just use that extra money on college funds or investments. Plus, credit problems won't arise since you wouldn't have the need to have your credit history checked. This may also lead you to getting better deal, with negotiated price, which will then result to a smoother transaction.
CONS Of Paying Cash In Home Buying
Yes, the satisfaction of buying a home without borrowing money is one of the best feelings in the world. But it would also mean that a very large part of your savings will vanish. Technically, it's just the same - paying monthly or paying in whole, with just the interest as a difference. But if you pay in whole, there will be less cash left for miscelleneous expenses such as repairs and emergencies.
Property values will also affect you if you pay in instant cash. If you don't get a mortgage, your home will not have a purchase protection if the market value of your home ever drops. Also, without a third party in your homebuying, you may not be able to figure out if your purchase is overpriced.
As a conclusion, there are advantages and disadvantages in buying homes straight cash. To help you in your overall decision, hiring a real estate agent is a good idea.