There are all kinds of benefits of using cash to buy real estate in Ontario. Find out about the advantages and how to make it happen in our latest post!
The Benefits
You’ll Be The Favorite For Sellers
Yes, your all cash offer will stand out! If you are a cash buyer the process moves much more quickly and becomes infinitely more simple and streamlined. You won’t need to wait for standard bank approvals for a loan which could take weeks, the paperwork is much less and there are fewer headaches for all parties involved. Furthermore, the closing can happen much more quickly which will make everyone happy. In fact, many home sellers will favour a cash offer that can close quickly even if they need to sell their house at a discount.
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 it isn’t the right time to sell, rent it out. Ultimately, by paying in cash upfront you’ll be able to avoid market disturbances and sell when the time is right.
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 won’t have to worry about paying for bank appraisals, applications, or mortgage fees.
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.
Saving Tips
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.
Treat Your Savings Account Like A Bill
Figure out how much you need to save and how long it will take you. Make automatic deposits 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.
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 admin costs, painting, utility deposits, closing costs, cleaning and other things you may need once the home is purchased. Landscaping, repairs and professional cleaning 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.