Things to Consider When Buying a Home With Cash

Things to Consider When Buying a Home With Cash

  • Megan Douglas
  • 04/9/19

If You’re in the Market for a New Home and You Have the Ability to Buy With Cash, the Odds for Finding Your Dream Home May Be in Your Favor.

But before you head to the bank, consider both the pros and the cons of skipping the mortgage.

You Entice the Seller.  

Sellers love cash buyers, and will favor them in comparison to an offer with a loan attached. This means that buying with cash gives you leverage in the negotiation process.

You Can Skip the Interest. 

While a home purchase is already an investment, buying one flat out is an even larger one. This is because you save on mortgage interest that is usually paid over the life of the home loan – interest that could amount to anywhere between several thousand dollars to hundreds of thousands of dollars.

You Avoid Some Fees.

With an all-cash deal, you skip those loan origination fees, an appraisal, some closing costs and other charges imposed by the lender.

A Quicker Close.

Since you have no loan, once the seller accepts your cash offer, you can close much quicker – yet another reason sellers favor cash buyers.  

But before you dredge your bank account, consider the following potential drawbacks.

You May Be House Poor.

Make sure you can actually afford to put down cash on your new home. Sure, you may have the cash in the bank, but is it all the cash you have? If so, you could end up in the tricky situation known as “house poor” – your house is your only asset, and you have no free cash to spend.

Minimized Tax Breaks.

If your new home is going to be your primary residence, you will not be able to take advantage of the tax breaks available to homeowners with conventional loans. By paying cash, you basically forfeit those tax breaks. However, if you’re going to save more on interest than you ever would on taxes, buying with cash may still be smartest. Talk to your financial advisor before making a decision.

If you have any more questions regarding buying a home with cash, Contact me and I will be happy to give you more information.



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I genuinely care about my clients. (In fact, they’re often surprised by how much so!) But this is a major step in anyone’s life and I want it to be the best experience possible.

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