Most people think of long-term mortgages and APR when they think about buying a house. Did you know there is another way to buy a home without ever stepping into a bank to get a home loan? Have you ever considered paying for a home with cash instead of the banks money? Let’s look at foregoing the home loan in favor of dropping a few Clevelands (as in “Grover Cleveland,” pictured on the $1,000 bill) for that house:

Your credit is a null point here

One of the biggest advantages is that your credit history will not play a factor in buying a home. This is a big advantage for those who have no credit history, or their credit history is not the best.

This also helps speed the home buying process up. It generally takes two weeks for a bank to get all your home loan papers in order. Paying in cash cuts this whole step out. You also do away with the worry of a bank denying your home loan and the whole purchasing process falling apart.

Falling home prices have less impact on you

Let’s say you snagged your home for $150,000. You paid in cash. This means you own your home outright. Now the housing markets start to tank. Your home is now worth $140,000. Let us put this into another light.

You loose your job. You have to relocate to a new part of the country. You have to sell the house you just bought a year ago. You paid in cash so you have no bank to deal with. Your hose might have fallen $10,000, but you also have no home loan to deal with.

This means that when you sell it you will not have to worry about the fact that you still have a $145,000 home loan to deal with. You will not need to borrow the difference to pay off the bank. While you might feel your losing money now, it is still less than paying the interest on yet another loan

Negotiating deals becomes easier

Negotiating a deal on anything is always easier when you have the greenbacks to pay for it. People like cash. People can spend money right away. People can pay off loans right away with cash.

Paying in cash also helps in quick sales. You find a house that the owner is trying to dump in a hurry. You are competing with three other families for this house. While your offer might come in lower than the other people, you are paying in cash. This means the seller can move this house in 15 days versus 30, or more, day. You have the advantage.

You are free to invest your money

A home loan always comes with an interest rate of some sort. This interest rate might be small in the scheme of home loans. Yet, it is still money you are paying a lender. You are better to spend that interest money on other investments.

Paying for a home in cash takes a lot of planning on your part. You need to ensure you don’t stretch yourself thing on that bank account. Yet, there is a lot to be said about not having a home loan.

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