Buying A Home With Cash vs. Financing in The Northwest Valley
We’ve all heard that going into debt is a bad idea but sometimes it makes sense to finance a large purchase, like a home. There’s a lot to consider when making a large purchase and every situation is unique. So which is better — buying a home with cash or financing in the Northwest Valley? We’re going to take a look at some of the pros and cons of each of these options in more detail. We’ll start with the financing option.
Financing a Home in The Northwest Valley Pros
Even if buying a home with cash is affordable, it might make sense not to tie up most or all of it to purchase a home in the Northwest Valley. The most obvious benefit here is that you get to keep most of your cash. Tying up your cash may limit your options down the road if other needs arise. For instance, if you need to make renovations or repairs or if you need to make a down payment when it’s time to buy a new home. Financing also improves your credit score, while allowing you to use your cash for other investing opportunities.
Financing also allows you certain tax benefits that are not available to you if you purchase a home with cash in the Northwest Valley. With a financed property you can deduct your mortgage interest and potentially some home improvements. Additionally, financing also allows you to take the homestead exemption, which in Arizona allows a homeowner to protect $150,000 in equity from general creditors.
Buying a Home with Cash in The Northwest Valley Pros
Let’s take a look at the benefits of buying a home with cash in the Northwest Valley:
FASTER WITH LESS HASSLE
Buying with cash means eliminating the lender. This means no filling out lender paperwork, not having to pay lender fees, not having to wait on loan approval and processing. If your credit score is less than stellar you don’t need to worry about that if you’re buing a home with cash in the Northwest Valley. A cash closing is typically a lot faster as well since there are less people involved.
When you buy with cash, the home is all yours on signing the papers and handing over the money. This means that it isn’t co-owned by you and the bank, and it’s fully paid for. So you immediately have the full equity of the home’s worth available if you should need it to secure financing for other purchases or investments. An equity line of credit can be a lifesaver sometimes.
NO MONTHLY MORTGAGE PAYMENTS
Buying a home with cash in the Northwest Valley means you won’t have to worry about making monthly mortgage payments for the next 30 years. You will still have expenses in the form of property taxes, insurance, maintenance and utility costs.
NO MORTGAGE COSTS AND LOWER CLOSING COSTS
The next pro of buying with cash is the thousands of dollars you’ll save by not paying loan origination fees, processing fees and mortgage insurance premiums. You will also save thousands and thousands of dollars by not paying interest over the life of a loan. Finally, the closing costs are much lower with a cash transaction.
In closing, buying a home with cash in the Northwest Valley gives you buying leverage. Cash can be a powerful negotiating tool and can make the difference in a bidding war. Money talks and when you have it and show it to the seller, your offer instantly becomes more attractive.
So, what is the best option: that depends on your situation. Whatever option you choose to buy, we are here to help!
Do you want to learn more about buying a home with cash vs. financing in the Northwest Valley? We can help! Send us a message or give us a call today! (602) 806-8834
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