Think Twice Before Paying Cash Instead of Using a Florida Home Mortgage
So, you’re ready to purchase a house. Congrats! This is a big, important, exciting step. But please don’t tell us you’re thinking of spending cash on a new residence, as opposed to a Florida home mortgage loan? Let us explain why this is rarely a good idea.
There are three reasons - none of them overly convincing - related to why one would think about forking over a chunk of cash on property instead of a loan. Either you’re:
- Very wealthy
- Ready to spend cash you never need to see again
- Able to tie up a large amount of cash in one asset
A better alternative is to pay a 20 percent or 25 percent cash down payment. From there, obtain a fixed-rate 15- or 30-year Florida home mortgage for the balance of the purchase price.
This is the safer way to go. In case you bought a “bad house” or a “bad condo,” you won’t have all your nest egg tied up in it. After a few years of owning and living in the home, if all turns out well, then you can pay off the mortgage (of course, be sure it doesn’t have a prepayment penalty).
Here’s a quick story of someone who did, in fact, pay all cash for a condo: Only after moving in did this owner discover the complex was badly managed, as it was occupied by about 50 percent renters who caused many problems.
When she tried to sell her condo, she discovered mortgage lenders either refused to loan to new buyers or they charged very high interest rates because of the high risk with so many renters around. The only way she could get her cash out was to sell to yet another all-cash buyer.
The moral of this troubling tale? Do NOT be that all-cash sucker. Use the FREE form above to get the Florida mortgage process underway.
