What to Consider When You Buy a House with Cash?

Of the advantages of buying cash it is quite known. From saving time and money, to be able to make much faster transactions, are some of the benefits mentioned in the subject.

But we must also talk about responsibilities, paying cash for your property, do not relieve them and this is one of the biggest surprises of buyers who buy without the right information.

It is mistakenly thought that frees you buy cash commitments. Although they have a point, because if you take away the great burden that represents pay a mortgage to 30 years, in most cases, there are other things you can not delete.

Let’s review the implications:

Responsibilities of cash buyers

  • Payment of property taxes. These as usual, will be according to the value of the property and where you live. Vary depending on that and other conditions, in some cases the size of the apartment, the location within the community and the size of the batch or lot. Even if you are paid if you can continue to have tax exemptions on the property if your main home. Find out about your rights.
  • Maintenance. This does not depend on whether or not you mortgage. The monthly cost will be the same for you than for any other neighbor who has a loan, and obligations as well. If not paid on time, as are other payment obligations have housing, could ultimately result in you to lose the property.
  • Insurance. Purchases in cash nonpayment of mortgage insurance is required (because no mortgage), but it is very desirable to have your investment cover against hurricanes, earthquakes and floods. Besides theft. It is an expense, but it is the way to protect you and the money you paid. Ask your insurance agent confidence and evaluates its recommendations. Always ask for quotes to compare different companies covered and costs, but do not neglect.

The disadvantages

  • By not paying interest on a mortgage loan, you have nothing to deduct on that line to fill your contributions to personal income (Income Tax). Consult your accountant or the appropriate agency where you live.
  • Many cash buyers use all their available money, running out of an emergency fund. This is not recommended. Although it is very healthy cash purchase, there are always unforeseen and have some savings gives you peace of mind. If you look very “tight” your pocket and budget to buy cash, you can make a small short-term mortgage, if allowed and if you qualify. That way, you do not stay penniless.

What you should know

  • In some cases, it could deduct some expenses such as property improvements, if they are substantial. Check with your accountant what might apply yourself and what tax relief would offer your property, if any.
  • The houses have no loan that are candidates for small to solve situations familiars as children’s education and health problems mortgages. It will be easier for a bank to make you a leaning against the value of your home loan. However, the property should never be seen as an option for gay expenses such as travel and superficial issues. Make sure that if you take money for something it is necessary, and above all, you have ability to pay.
  • Another common measure is to make a loan for a second home or vacation investment. If the value of your property rises high enough, the risk may be worth it if you get a chance. Do not take the decision lightly, research with an expert first.

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