Simply put, the answer is yes: you can buy your house with cash. Typically, there are two ways that people buy their homes- either by getting a mortgage or paying with cash.
By getting a mortgage, you’ll be agreeing to pay a deposit and borrow the rest of the money you need from a lender; agreeing to pay back the money you borrowed each month until your mortgage is paid. However, buying a house with cash means that the house is yours straight away, with no continual monthly payments.
There is no right or wrong way to buy your home- it generally comes down to preference and what best suits your situation. So, we’ve put together this article to give you a better understanding of what buying a house with cash means, what the process is, as well as the pros and cons.
What does buying a house with cash mean?
The main difference between buying your house with cash and buying it with a mortgage is that your house is yours outright. This means you won’t have to worry about monthly repayments, and you have the security of knowing the home you live in is 100% your own.
What is the process of buying a house with cash?
Now, you might think the process of buying your home with cash differs quite significantly than buying it with a mortgage, but it really doesn’t. The only difference is, there’s no need to go through the process of a mortgage application when buying outright with cash.
We’ve put together a quick step-by-step guide of buying a house with cash to give you a better idea of what the process looks like.
- Search for your dream home and make an offer on it
- Your offer is accepted
- Bring in a solicitor
- Bring in a surveyor- this is key to making sure the property you want is structurally sound and without issues
- Exchange contracts and put down your deposit
- Put down the rest of your money and complete any outstanding tasks
- Congratulations- you now own your dream home!
Although not having to go through the mortgage application process can make buying your home with cash seem like the simpler option, it’s also good to be aware of the drawbacks of it too.
What are the benefits and drawbacks of buying with cash?
As with any venture, there can be pros and cons to both sides- it all comes down to doing the right thing for you and your circumstances. But just so you know exactly what buying with cash entails, we’ve put together a list of some of the advantages and disadvantages you may want to consider.
Some of the advantages include:
- A quicker buying process- by paying with cash you eliminate the need to go through affordability checks with lenders.
- More security- since buying with cash means the house becomes yours outright, you know that no matter what happens, you’ll always have a roof over your head.
- No interest- as you won’t be buying your home with a mortgage, you won’t need to pay any interest on your home, and so can save money by not having to pay monthly repayments.
Some of the disadvantages include:
- Large amount of money- buying a home with cash is a big responsibility, not to mention a massive expense. You must make sure that buying with cash is something you can afford, without leaving yourself short to pay other bills and expenses.
- Your money is tied up- although owning your home is a massive achievement, it’s worth considering the drawback of having all your money tied up in the one place.
At the end of the day, how you choose to buy your home is up to you. But if you do need some guidance or want to know if buying a house with cash is right for you and your personal situation, speak to one of our advisers who can help with any questions you might need answering.