RE: Why you should always buy a property on loan
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I respectfully disagree on a couple of points.
- When you pay cash you do not completely lose access to the liquidity. Because you start with a clear title you have many more options for using the property as collateral, providing cash that you can spend or invest.
- In a cash transaction it's essentially just you and the seller at the table. Lenders often insist on standard terms. A cash buyer has much more flexibility.
- Cash transactions are faster.
- Lenders often insist on additional expenses: such as mortgage insurance, appraisals, inspections and other layers of bureaucracy.
Finally, I'd note that just because it looks to the seller like I'm paying cash doesn't mean I didn't borrow the money. Because the seller is walking away with cash there's comparatively little examination of my finances. This can be important for privacy reasons.
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If you take line of credit on cash bought property, then you are essentially taking a loan on higher rate of interest.
I always buy on loan and still close in a month. You just need to find a good lender to work with.
Mortgage insurance is always required when u pay less than 20% down, otherwise you dont need it. Appraisals is something that helps u determine actual worth of a property and helps with price negotiations.
Inspection has always saved me money. I usually pay 350$ for inspection and they find enough stuff wrong with the house that i make seller pay for it.