If you’ve been in the market to buy a home in Albuquerque, you’ve no doubt come across the concept of cash buying. Usually, it’s a tactic meant to sweeten the deal. But there are, as always, pros and cons of buying a home with cash.
It’s Less Common
Not as many home buyers are buying with cash these days. It’s just not as possible for most people with median home prices at around $300,000. According to the National Association of Realtors, around 87% of home buyers used financing when purchasing a home.
Buying with cash doesn’t mean you’re showing up to the closing with a briefcase full of cash. It just means you’re not using financing. You might pay for the home with savings, selling another property, or investments.
The Pros of Paying Cash
Paying with cash has some great benefits, such as:
- With stiff competition in the home buying market in Albuquerque, you’ll be more attractive to sellers. When it comes down to bidding wars, the cash offer will give you an edge over other buyers. Financing can fall through and delay the sale. Cash transactions usually close faster.
- You don’t have to deal with mortgage payments and the added cost of interest.
- Lower closing costs because you don’t have to pay lender and loan originating fees.
- Faster closing.
- The home is yours. You won’t fear losing it if you can’t make the mortgage payments.
The Downsides of Paying Cash
There are a few cons of paying cash for a home that you do have to think about as well.
- If you use all your money to buy the home, you won’t have access to it later if needed.
- There may be better ways to invest your money than to put it all in a home.
- You won’t be able to claim mortgage tax deductions, which allow you to deduct the interest on the first $750,000 of your mortgage.
If you’re still wondering if buying a home with cash is a good idea for your situation, talk to a financial professional. They can go over your finances to help you decide what the best course of action is. And of course, we can also help you weigh the pros and cons as well to fit your specific real estate needs.