There are many benefits when using cash to buy your next property in Chicago. Learn more about the advantages and how to make it happen in our latest post!
There are all kinds of benefits of using cash to buy real estate in the Chicago area. In many cases, you will be able to save time and money by paying cash. Below, you’ll learn about some of the biggest benefits as well as our saving tips to help you use cash to buy your next property in Chicago,
You’ll Save Money
First of all, you will save money across the board. Without having a loan, you are saving thousands of dollars in interest right off the bat. You will save on loan origination fees as well which often run 0.5-1.0% of the total loan amount. You won’t have to worry about paying for bank appraisals, applications, or mortgage fees.
You’ll Be The Favorite
Ok, well at least your all cash offer will stand out. A seller will often favor cash buyers as the process becomes infinitely more simple. The process is streamlined and moves much more quickly. You won’t need to wait for bank approvals or for the loan to be processed. There is less paperwork and fewer headaches for all parties involved. The closing will happen much more quickly which will make everyone happy. In fact, many sellers will favor cash buyers, even offering a discount in exchange for a quick closing. This will also help with your ability to negotiate.
You’ll Gain Full Equity
As soon as the house is in your name you will gain full ownership and equity. You’ll be able to borrow against the equity with a home equity loan or reverse mortgage.
Avoid Market Fluctuations
The market can rise and fall and rise again, but you will have the security of outright ownership. If you decide you want to sell, you’ll likely have the freedom to wait until the time is right as you won’t have an expensive mortgage weighing you down. If the house isn’t right for you to live in, rent it out. But by paying in cash upfront you’ll be able to avoid market disturbances and sell when the time is right.
Buying a house in cash can feel a bit daunting if you are starting from ground zero. No matter how inexpensive the house is, paying in cash will likely require you to do a bit of saving.
Get A Realistic Idea Of How Much You’ll Need
After you figure out how much you want to spend on the house itself, you’ll need to add up all the other expenses you may face when buying a property. There will likely be administrative costs, closing costs, utility deposits, painting, cleaning and other things you may need once the home is purchased. Landscaping, professional cleaning, and repairs that seem minor can add up quickly. Always save up a considerable amount more than you wish to actually spend so you don’t find yourself stuck trying to fix a house without any cash left.
Treat Your Savings Account Like A Bill
Figure out how much you need to save and how long it will take you. Make a deposit into your savings account each month to get you there. Of course, you could choose something with a higher interest rate than a standard savings account, but you get the idea. Set goals, and take the steps you need to get you there.