Does It Make Sense To Buy Real Estate For Cash?
Probably the best answer works like this: Is there a better place to put your money? Is there an alternative investment that will produce like returns with equal risk? Is it simply more comfortable as a matter of personal preference to pay cash?
The decision to pay cash or not pay cash includes both economic considerations and personal choices. Many people simply prefer a home which is free and clear of all debt.
There are several advantages the can be obtained by paying all cash. There is no mortgage application and no need for private mortgage insurance. There is also no mortgage interest to write off.
However, if you elect to pay all cash, be sure to insist on the purchase protections that any lender would want — a title inspection, title insurance, survey, termite inspection, appraisal, etc.
It may be worthwhile to sit down with a tax professional or a fee-only financial planner to review the consequences of paying all cash or financing. Be aware that if you pay cash for a residence then your ability to deduct interest if you later refinance may be limited.
© Copyright 