Cash is King...Or Is It When Buying A Home
Hi and welcome to another two minute Tuesday.
If you've seen my previous videos, you know I bring valuable topics to homeowner,
home buyers & home sellers. Check back every week to see a new video.
They say “Cash Is King”....or is it?
Should you purchase your home for all cash, or is it better to get a mortgage?
In 2018, 23% of home buyers paid cash for homes!! That’s an amazing statistic. And in my market of Orange County CA, 29% of homes have no mortgage at all.
Easy to get offer accepted.
Fast transaction (especially for the seller).
No appraisal or loan contingencies are required which will lengthen the sale if you’re getting a mortgage.
And there's no Credit check required.
Alternatively, You could use a large portion of your cash and get a small mortgage with a favorable rate and no PMI which would preserve some of your cash.
You could use all of your money to make a purchase - but no cushion for repairs, emergencies.
You can't diversity or leverage your money for other investing
Your Money is tied up and not liquid...but you could get a home equity loan,HELOC or reverse mortgage if fast cash is needed.
ALTERNATIVE to using ALL of your CASH?
Your money could be diversified into other investments - stocks, mutual funds or a business opportunity.
Buy multiple houses or multi-unit building. Everything from a duplex to an apartment building.
Another option is to buy the home for cash and then finance it after recording - takes advantage of your cash position to make the purchase, then gets your cash back when you get a mortgage.
So here's my warning...
Before you make any decisions about using all cash for a purchase, talk to your financial consultants, CPA, CFP, or Aunt Betty to satisfy yourself that you are making the right decision.
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Check back next week for another episode of Two Minute Tuesday...
And I'll see you on the next video.