Advantages and Disadvantages Of Buying A House With Cash

According to the National Association of Realtors, the number of homes bought in cash has drastically increased from 26% in 2010 to 32% in 2011. Although this may not be the best option to many homeowners as buying a house in cash is just a far-fetched dream, this trend is becoming more common in the real estate market.

While the factors that brought this increase remain unknown, many real estate professionals says that this is driven by falling home prices brought about by recession and the stricter standards of banks when it comes to obtaining loans. Regardless of these reasons, still paying cash is becoming a more common trend in the real estate market. And if you are someone who has sufficient cash in hand to purchase a house, do you think it is a good idea? Here is something to guide you.

Advantages Of Buying A House With Cash

More Efficient Buying Process. By taking off the bank in your buying process, you are saving a great amount of time and effort. You don’t need to sit with a mortgage broker and hope that everything will result in a loan term at your favor. It takes a great deal of stress and accelerates the buying process with a better price.

Security. In times of financial hard times, you don’t have to fear that foreclosure since you own your house already. Owing a house gives you a sense of security that no matter how rocky things might get financially, you will be assured that your family has a place to stay and lay their heads at night.

Less Concerns For A Fluctuating Market. One best thing about owning a house is no matter how the market does, you are able to make your own decision with what to do to your property without outside pressure. You don’t have to worry about mortgage payment at most.

Disadvantages Of Buying A House With Cash

No Liquidity. Paying that much money is going to cost you a great deal of liquid assets in the form of cash. So it is recommended that you buy a home the moment you have ample cash in hand - with a money sufficient to buy a house and a comfortable cushion of cash for emergencies.

No Tax Advantage. Unfortunately though, buying a home in cash will not save you from tax deductions. As there are mortgage proponents who argue to a favorable treatment of mortgage interest in the American tax code, looks like buying a house in cash is a bad news when it comes to tax breaks.

Purchasing a house with cash is now becoming a trend in the real estate market, and judging by the reasons above, the reasons now seem clear. It offers great benefits if you have cash in hand for the initial cost. Just make sure you set aside some cash for emergency purposes, and buying a house will be a one great financial move. Good luck!

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