You’ve got the money for buying a house with cash, but should you do it?

It seems like a no-brainer that you would buy a house in cash because of the interest that you’d save since you don’t have a loan. Is that all there is to it though?

Continue reading this article to learn the pros and cons of buying a home using cash.

What You Need to Know About Buying a House with Cash

Even if you think you have it all figured out, make sure to check out details on the home, any loans you might have available and more before you decide. Also, go through these following pros and cons carefully before signing on the dotted line.


Here are some major pros you might not have thought about when buying a house cash.

Gives You the Upper Hand in a Bidding War

You’re in a bidding war and you really want the house. It’s getting pretty nasty and the numbers are going higher and higher.

Besides for the price of the house going up, it is taking forever to close the deal. You want to move into the house soon because your lease is almost up at your apartment.

You’ve been saving your money though and you have a big lump of cash. If you have cash, sellers will often opt for a buyer that is paying cash over a buyer that has to get financing.

If you want to win the bidding war quickly, offer to pay in all cash if they accept your offer right away.

Close Faster

When you don’t have to go through a bank to get a loan, you can close on the house faster. There is less paperwork and fewer things that could come up during the last steps of the process.

No Unexpected Loan Challenges

Even if you get approved for the loan before you go house shopping, things can change. If your credit utilization goes up before you go to purchase the house or if you or your co-borrower take on another loan, you could be out of the loan for the house.

When you buy cash, you know you have cash and you don’t have to worry about a last-minute denial or requests for further documents. 

Save Money on Fees

When you pay cash, you pay fewer fees. You’ll save money on origination fees, appraisal fees and other lender fees that you might not even think about.

Save Money on Interest

Another point almost everyone thinks about is the interest you’ll save money on. If you don’t have a stellar credit history, the amount of interest that you are required to pay for a home loan might be very high.

The higher the interest would be, the better the savings you would have. Before you decide to buy your house all cash, check to see how much money you’d save avoiding interest on the loan.


Here are some major cons you might not have thought about when buying a house in cash.

May Cause You to Over Pay

Since you don’t have to have an appraisal to buy a house with cash, you might decide to waive your right to an appraisal. Many people decide they want the house so why worry about an appraisal?

While it might make sense to save money at the time of the purchase, you could end up overpaying for the home. Without a proper appraisal, you may miss things that take the value of the home much lower than the amount of cash that you’re going to pay for it.

If you get an appraisal and it is much lower than the asking price, you might be able to talk the seller down. On the other hand, if you choose to opt out of the appraisal, you could be costing yourself major money in the long run.

Ties Up Cash

If you have exorbitant amounts of cash laying around, tying up your cash might not be a big problem. Most people don’t have unlimited cash at their beck and call however and if that is you, you might not want to tie up your cash.

If all of your cash is in your house, you won’t have it available to invest in other opportunities or do other things that could bring a large return on investment.

No Interest Tax Deduction

Interest on a mortgage is tax deductible. If you pay cash for your home, you obviously won’t have a mortgage which means there is no tax deduction. The cash that you pay for your house is not tax deductible so know that you won’t have that to look forward to when the tax person comes calling.

What Is Right for You?

Depending on your goals, you’ll be able to determine which option is right for you. If you don’t need cash on hand and you don’t want to pay high interest then the cash option might be the best route for you.

On the other hand, if you want to grow various investments, you need to free up some of your cash which might mean that you need to leverage debt to do that.

Learn More About Real Estate

Now that you know more about buying a house with cash, keep the learning going. Hop over to our blog and read more about real estate to find out how you can grow your business empire and investments.