Wednesday, August 28, 2013

Buying A House On Cash Or Through Bank Financing: Which Way To Go

Now that the real estate market is back in full swing, there is now a growing market for first time home buyers who want to take a bite and become home owners. Being a first time home buyer, there are so many questions to be asked. Even where to start becomes a question when it comes to buying a house and lot. One of the biggest factors in considering which house to buy is the available financial resources you currently have and the amount of money you can put into the monthly mortgages. For some first time home buyers, it can be really hard to secure a housing loan because they do not have collateral they can use to secure a loan or their credit ratings are not up to par yet with the minimum requirements set by local commercial banks. So, with this in mind, they start to shy away from buying a house and lot. For other people, they have already set a good amount of savings in their bank accounts and have made enough sacrifices to buy that first house to call their own. Is it better to buy a house using cold cash or through bank financing?

Buying A House Using Cash 

If you already have a sizeable amount of money saved and ready to splurge on that first house and lot, now would be the best time to check around property listings so that you know current prices of houses for sale in your chosen area. As a good tip, make sure to choose an area that you think you would want to live in and compare houses around that area. See the lowest priced homes and the most expensive ones. When you are able to compare the prices of houses for sale, it will be easier for you to decide how much you actually want to spend. A plus when you buy houses on cash is that most sellers will likely shave off a few thousand dollars from their asking price and everything will be easier to settle. 

Buying A House Using Bank Financing 

This is by far the most common way to buy a house these days because honestly, most people are not willing to part with a lump sum of money right away or they do not have the huge amount in their hands. Do not worry because this is perfectly fine. As a tip, make sure to contact a licensed real estate agent in your chosen area so that they will be able to help you out throughout the whole process.  You will also have all your questions answered thoroughly by them. It would also be best to write down everything on paper about any questions you come up with and even discuss these with the bank representative who will be handling your housing loan application. Be prepared to deal with a ton of paperwork and filing and also to give ample time before your loan gets feedback. 

Buying a house and lot is always a huge purchase; therefore, do not feel let down if some steps may be taking too long or your housing loan takes forever to be approved. Use this time to clear out your house and even set up a garage sale if you are sure that you will be moving out soon. Good luck on your house hunt!

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