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I know it's "peace of mind", but why would someone pay cash?
Where in the world can you borrow money at 4%-5%? Count in inflation, count in mortgage tax deduction (hopefully they don't take away....even still) what % did that loan actually cost you? 2% +/-?
Now most would say "you save all that interest " Try, but put away that money for 10, 20, 30 years, with compounded interest. Better than being "house rich". After 5, 10, 15, 20 years you can THEN pay off if you want.
I know everyone's situation is TOTALLY different. This is NOT a one size fits all approach.
I know it's "peace of mind", but why would someone pay cash?
Where in the world can you borrow money at 4%-5%? Count in inflation, count in mortgage tax deduction (hopefully they don't take away....even still) what % did that loan actually cost you? 2% +/-?
Now most would say "you save all that interest " Try, but put away that money for 10, 20, 30 years, with compounded interest. Better than being "house rich". After 5, 10, 15, 20 years you can THEN pay off if you want.
I know everyone's situation is TOTALLY different. This is NOT a one size fits all approach.
Just my opinion.
They have more power as a cash buyer and can beat out buyers who need a mortgage. They can always get a mortgage after the purchase.
A meaningful percentage of home buyers in this region uses all cash.
According to the data in this recent report, all cash buyers make up 40% of buyers in the New York City metro area, 40% in the Philadelphia metro area, 42% in the Trenton metro area, 50% in the Atlantic City metro area, but only 22% in Fairfield County.
I wouldn't be surprised if the majority of Long Island home buyers have the ability to pay entirely with cash. I paid all cash because 1) my offer was more competitive than offers with mortgage contingencies and 2) mortgage lenders are lousy at originating and funding mortgages in a timely manner and I wanted to avoid the inconvenience of a delayed closing date.
Say you pay cash for a 1.5 mio place vs putting a 300k down payment and financing the rest at today's low rates.
Are you able to pull 1.2 mio cash out after the fact at that same rate? I thought you can only take out a home equity loan which has limited interest deductions.
Say you pay cash for a 1.5 mio place vs putting a 300k down payment and financing the rest at today's low rates.
Are you able to pull 1.2 mio cash out after the fact at that same rate? I thought you can only take out a home equity loan which has limited interest deductions.
You can do a cash-out - if you qualify for a mortgage! The amount depends on several things, and can vary from lender to lender.
Some buyers use their cash because they may not have any or poor credit. Some don't understand leveraging; others just don't like having debt of any kind and sleep better without a mortgage. And sellers often prefer a cash deal over a mortgage, because of fewer potential hold-ups (and faster closings).
Different strokes for different folks
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