Should you buy in cash or Mortgage?

You’ve just settled on a property and its now the key moment whereby you’re just about to buy your dream home. But there’s a hitch, you are torn between buying the house in cash or financing the deal through mortgage payment. We are going to look at some pros and cons of both to help you decide on which is the most preferable method for you.

Cash makes you an Attractive Buyer

It is no secret that every seller would be attracted to a cash deal as it not only makes the deal sweeter but also closes the deal earlier and with ease which is the ultimate dream of every party involved. This is partly because the process of applying for a mortgage can sometimes be time-consuming with no assurance of the process going through.

Cash makes you stress-free over mortgage payments

While buying a house in cash makes you an instant homeowner, a mortgage payment plan takes a whole lot longer before you can finally become a homeowner. That’s without mentioning that most mortgage plans take a lot of time (years) before one can completely finish his last mortgage payment. Paying for your house in cash or paying your mortgage early can be a smart move in giving you the homeownership feeling.

Is Mortgage Better?

A mortgage payment plan offers liquidity as one is only required to put little money upfront with your bank financing the remainder of the cost. You, therefore, get to tie a lot less money to a single asset compared to the amount one foregoes when purchasing an asset in cash.

Mortgage offers flexibility

Unlike someone who has purchased his home in cash, the one with a mortgage plan is able to increase in investments by putting his money in other projects as the bank takes care of the house. This means that the mortgage plan makes you more liquid and won’t massively cut your cash flow.

Ultimately, your mortgage planner can also improve your credit score when payment is completed on time. That provides you with a trustworthy face before the eyes of bankers therefore making it quite easier for you to access more loans in future while chasing another investment.

All the payment plans above play a significant role in the number of returns you will get in future. A Mortgage plan has an upper hand with regards to better returns on investment but the bulk of the decision has to be guided by your flexibility and what will make you comfortable in the long run.

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