When buying a home, you can choose one of two options: to buy it upfront or take out a mortgage on the property and pay it off over a fixed term.
Both ways are costly, however, buying a house with cash is the obvious most expensive option. Paying upfront requires you to pay the price that’s on the tag, whereas, taking out a mortgage allows you to pay off the property over a long period of time.
If you have the funds in place to do so, buying a property with cash could be a great investment. Whether it’s to live in yourself or to use as a buy to let in Sheffield, it can put you ahead of people on the property ladder who have taken out a mortgage.
9 times out of ten, when making an offer on a property, if you’re a cash buyer you’ll have an advantage over other applicants who are taking out a mortgage. One of the reasons is due to your reliability.
A property seller who is looking for a quick purchase will love a cash buyer. Having a cash offer eliminates the probability of getting caught up in the property chain. This is where a property is being sold to a buyer, however, they can’t move in yet as they’re still trying to sell their current home and sort out their mortgage. This can go on and on, ending in repeated homeowners struggling to move out as they’re waiting on their buyer to move out.
This shows your reliability. You don’t have to wait around for your buyer, they can proceed straight away. Also, you won’t have to pass any affordability checks as you already have the funds in place and you won’t need a valuation to be carried out on the property.
Everyone wants a quick and simple process when moving home in Sheffield. It’s more than likely that if you were to make a cash offer, you’ll see the process through within no time at all as opposed to having you taken out a mortgage.
You won’t have to take out a mortgage if you choose the cash route. However, as a mortgage broker in Sheffield, we can say that sometimes it’s just as quick to take the mortgage route. It’s our job to provide a fast and friendly service in Sheffield.
Taking out a mortgage is the same as taking out a loan. You’re committing to around 25+ years of potential mortgage payments. If you buy a property with cash, you won’t be making this commitment.
You also won’t receive any interest. Your mortgage payments may increase each month due to interest, whereas if you’re buying with cash this can never happen as you’ve already paid it all off.
If you don’t have the funds in place to make a cash payment, you’ll have to take out a mortgage on the property you’re looking to buy.
Rather than using all of your life savings to purchase a property upfront, you could save money short term by taking out a mortgage instead. Usually, depending on your credit score, getting a mortgage will only require a minimum of a 5% deposit (5% of the property’s value).
A mortgage allows you to pay off your home in monthly payments. Monthly payments allow you to pay little back each month not the whole of it in one go.
If you’re looking at a property and the listing says “cash buyers only”, it’s likely that the property needs lots of repairs doing on it. If this is the case, you are unlikely to be able to get a mortgage on this property. You may be dodging a bullet if you are choosing a mortgage over cash here.
Even though it’s not required, we’d always recommend getting a property survey carried out just in case. This applies to both cash buyers and mortgage applicants.
Going into a cash purchase blind may put you at a slight disadvantage to someone who has a mortgage advisor in Sheffield by their side. Things are as simple as possible when you have your own mortgage advisor in Sheffield.
As a mortgage broker in Sheffield, it’s our job to deliver a fast and friendly mortgage advice service. Get in touch today and we can help you through the moving home process. We can help you make an offer on a property, arrange an AIP within 24-hours and perform a free affordability assessment on you.
Date Last Edited: January 30, 2024