How Paying Cash Changes the Game
Let us start with the obvious benefits. If you buy a property in cash:
• 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 Cash offers are very attractive to sellers for many reasons. 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 your home after a cash purchase. This may be a good option, to reap the benefits of both worlds. You can optimize your buying position and get a good deal as a cash buyer, then finance afterwards for the advantages stated later in this chapter. One caveat to doing this, and it's a very important one - the financing has to be done preferably within 90 days to qualify for the delayed financing exception, in order to take advantage of the mortgage interest tax deduction. You do have up to 6 months, but refinancing within 90 days simplifies the classification as deductible "acquisition debt". Again, I am not an accoiuntant or tax attorney, and rules change all the time, please consult the proper professionals before taking any action on any information in this book.) On top of that, there is a significant 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.
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