Things to Know When Paying Cash for a Home

If you have enough cash to buy a house or a property that both you and the seller have a lot of advantages. The advantages for the seller is that he no longer has to sign a contract which has a standard home financing contingency clause and they do not have to wait until the mortgage is approved by the bank to receive their money. For you, the buyer, the advantages consist in saving a lot of money, money which you can use in other purposes: you do not have to pay insurance for the mortgage, for the owner of the home and for the title.

The first thing you need to know when you are buying your home with cash is that you do not have to pay interests on your loan. Because you are paying with cash and not take a mortgage or a loan you do not have worry that you have to pay every month your mortgage and any taxes which go along with not having enough money to pay a house.

If you borrow a house from someone than that will cost you. For this you will have to pay a couple of insurances so that the owner can feel safe to let you stay in his place. You will have to get a lender’s title insurance policy, an insurance in case something brakes and a mortgage insurance.

Taxes are also a responsibility for a borrower. You are required to open a special account which is called escrow. Through this escrow account you will pay the taxes for your property, the mortgage insurance and the insurance for the home. Through this account the lender makes sure that you are paying all you taxes and that he is not loosing his investment.

These are some of the things you need to know if you are thinking of buying a home and paying cash. As you can see, if you have enough money to spend on a home that you save a lot of money. One thing you are enjoying is the fact that you do not have to worry about the mortgage which you have to pay every month. If you have to choose between the two do a little more research and you will see the advantages of owning your own home compared to one bought through a loan.