Things to consider when buying a home: Cash vs. Leveraging


In today market, cash I feel is better, especially in today’s market when things are so unsettle.

 A home is something tangible and can be made into something you can enjoy as well as earn some appreciation and value in your net worth. The value of money, seems to decrease in its buying power, especially with the looming threat of inflation. 

Gold is good, but it seems only in unsettle times of uncertainty and never in a stable economy where with home ownership,  it grows with the economy, and in bad times, you have a comfort of a paid up shelter that you are enjoying. 

Which is best; gold or home ownership? 

 My opinion, home ownerships trumps. You can live off the land, not sure you can with gold, if so, you have a limited life expediency 

Benefits of a CASH purchase:

  • Complete ownership of your home with no mortgage payments or mortgage interest. Mortgage interest can sometimes be double or triple the actual loan amount.
  • Closing costs are minimized
  • Cash gives you better buying power. You can put in an offer with no mortgage contingencies. A cash offer is a stronger offer than one that needs financing.
  • You can take out a loan on the property using the value as collateral

Benefits of FINANCING the purchase:

  • By obtaining a mortgage, the buyer employs one of the most basic principles of real estate purchasing: using leverage by buying with other people’s money. Your cash can be kept on-hand for other purchases, emergencies or other investment opportunities.
  • No mortgage interest means loss of the interest tax advantages.
  • Other closing costs may also be tax-deductible. For example: discount points. Also, with a mortgage loan some fees can be financed to provide greater purchasing leverage.
  • With obtaining a mortgage loan, the Lender will always do an appraisal to find out the home’s value. With a cash purchase, there may not be an appraisal done so the buyer may pay more than the property is worth.
  • Mortgages applied for after-cash purchases might be considered refinance and therefore not be as low in interest rates and fee.

Thanks for reading my post. Your commits and grading is important, feel free to do so.

remember: “Pictures without the information is never the whole and true story ~!” Realtor Ron W

Please visit me at www.rwolchesky.wordpress.com and watch the live web cams of many of our beaches and water ways. See and read about why Cape Coral, Fort Myers and Southwest Florida is a exceptional place to call home and invest in.

Ron Wolchesky realtorronw@yahoo.com  home phone: 239-349-4684

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