Most people take out a mortgage when they buy a home. But if you have enough cash on hand to buy the house outright, you might want to just buy the home with cash instead. The obvious benefit to this is that you won't be paying thousands in loan interest over the next 15 or 30 years as you would with a mortgage. But there are many other benefits of buying a home with cash. Here's a look at a few of them.
You don't have to wait as long to close.
The closing process can last several months in some states. A good portion of this time is spent waiting for the bank to approve your loan. If there's no loan to approve, your closing process should be much shorter. You'll just be waiting on the lawyer to do the title search and prepare paperwork for you to sign. As soon as this is done, you can hand over your check and get the keys.
You won't have to worry about the home passing the bank's inspection.
Before they will give you a mortgage, most banks send someone out to inspect a home. They may find things that they demand to have fixed before you're granted a loan. These are not always safety issues. Sometimes they're smaller things like loose gutters or lack of a railing on the stairs. If you pay in cash, you don't have to worry about satisfying the bank and can make these repairs on your own terms after you move in.
The seller may accept a lower offer.
When you buy in cash, it's a lot easier for the seller, too. They don't have to worry about being a go-between with your bank and theirs. They can also get out of the home much sooner thanks to the shorter closing process, which may be a real benefit if they're in a rush to move. In return for the convenience, the seller may accept a somewhat lower offer if you pay in cash rather than taking out a mortgage. You can put that extra thousand or two thousand dollars towards decorating your new home.
When buying a home with cash, make sure you work with a realtor who has experience in this regard. They can save you a lot of headaches when it comes time to sign the paperwork and prepare an offer for the seller.