• You pay no mortgage interest • Your closing can be faster and simpler because there is no lender involved • You avoid lender related fees like origination and some appraisal or underwriting charges • You become a stronger buyer in competitive situations Multiple studies and industry reports show that cash offers are very attractive to sellers. They eliminate financing risk, usually shorten the closing timeline, and can sometimes secure a small price discount because the seller values certainty and speed. (Did you know? You can always finance the home after your cash purchase. Which may be an option, get a good deal as a cash buyer, then finance for the advantages stated later in this chapter.) On top of that, there is a big psychological benefit. No mortgage payment. No loan balance staring at you. Many people love the peace of mind that comes from owning a home outright. If you grew up in a household where debt was considered stressful or dangerous, paying cash may feel emotionally correct, even if the spreadsheets tell a more complicated story. The Hidden Downsides Of Paying Cash Now for the tradeoffs. When you put a large amount of cash into a house, several things happen. 1. You Lose Liquidity Money in your home is not the same as money in the bank or in an investment account. It is locked into an illiquid asset. To access it, you would need to: • Sell the house • Take out a home equity line or cash out refinance • Or otherwise borrow against it All of those options take time, effort, fees, and in some cases 53
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