Getting an all cash house
Garden Music
3 years ago
last modified: 3 years ago
Featured Answer
Sort by:Oldest
Comments (33)
littlebug zone 5 Missouri
3 years agoLouise Smith
3 years agoRelated Discussions
Better to pay cash or get loan to build custom home?
Comments (38)So it's May 2015 and I am just joining this conversation with the same plans to build with plenty of cash to do it without compromising our retirement and other investments. I have already gained some new insights by reading everyone's comments here so thank you! We also have our current house almost paid off which will be used to recoup some of our costs when it sells. And like several of you, we don't want to sell and move two times so we'll wait until new construction is near completion. But something just keeps nagging me about having some kind of safeguard in case something happens along the way. We know and trust our builder, but hey, anything can happen expectantly along the way. So I Googled Beth's original headline and came across another blog that revealed something very reassuring to me. Everyone knows about construction-to-permanent loans, but how about just taking out the initial construction loan and then paying it off in full at the end with no permanent loan? The lender assumes responsibility for getting an accurate appraisal, inspections, approvals for builder draws and final title. A 12-month construction loan would involve miniscule interest costs for the peace of mind in return. And what say you? An inquiring mind wants to know!...See Moresomeone wants to buy my house cash/we still have mortgage
Comments (16)Most RE attorneys will not facilitate a "Subject To" closing, because they feel like they are helping to facilitate a civil crime. The current mortgage has a Due On Sale Clause which means that if the deed is transferred, the current mortgage must be paid in full. This clause was added in the 80's when interest rates skyrocketed and people found it beneficial to take a note subject to, at the current interest rate, as opposed to getting a new loan at the current, high interest rate. I know an investor that does Subject To deals all the time, and the lenders have never called the note due. But there is always that chance. He only is in posession of the home for a very short time, as he immediately rehabs and sells them. Unlike you would be. Another thing to think about... what is going to happen when you go to buy your next home and the lender finds that you have another mortgage? You will probably not qualify. And if you do, it might be considered a second home, which raises other issues. I personally would not do it... too much risk. If you do go through with it, set up a banking account in your name where the drsfts for the mortgage payments will be coming from, so the bank does not see the change. You will also have to figure out how to fool the banks as far as the insurance policy changing names, but the house was never sold. This is a major way that the bank will know that the home has changed hands. As you can see, even if no one has ever been prosecuted for doing this kind of thing, it is shady at best....See MoreWhy would a house be listed as cash only?
Comments (4)Is it a foreclosure? Many banks will not give a contingency for getting financing. When we bought our last foreclosure we had to prove that we had the funds available before they would accept the contract....See MoreAre we better off paying Cash or getting a Mortgage ????
Comments (67)The idea of front loaded interest on mortgages is a bit of a misconception, while you pay more interest in the early years that is only because you owe more money (If you have a 3.9% mortgage then you pay 3.9%/12 on the outstanding balance you owe each month). While that may sound pertinent, the discussion is really about effective interest versus compounding interest. As you pay on your principle you pay less interest, so over time the interest charges are smaller because your principle is smaller. While on an investment you start with a principle and if left alone for some period of time the interest continues adding to the principle and therefore pays more interest. This discussion is largely around the idea of people who have some income coming in and some ability to make payments. While, I could note that guaranteed payment annuities are about equal to house payments, they are no more liquid than houses so not really an investment that is better than a house. In the end, we are discussing people who want to be done with the headache of a mortgage and not people who simply don't have the income to continue paying a mortgage. Edit: It is also important to remember that a 15 year mortgage doesn't mean you have to make 15 years of payments. Making even a few years of payments before liquidating the investments to pay off the balance will typically result in gains. I think a lot of people focus too much on the stress of coming up with the money for monthly payments and forget that any time you get tired of stressing over payments, you can simply liquidate your investment and pay off the loan. While I have said the same thing jn3344 has many times, I have a completely different conclusion. When you have a paid off house and little money in the bank you have no options for dealing with uncertainty. Cash gives you options, the farther you get from cash the less options you have, and nothing is farther from cash than a house. Think of it this way. My father was just this week presented with a treatment option for a medical condition that was not covered by Medicare, the time sensitive treatment was going to cost $35,000, but it would greatly improve his quality of life. What allowed my father to make that decision was having access to $35,000, if he paid for his house outright and didn't have any money then he couldn't make that decision. Now suppose spending this $35,000 means my father will not be able to continue paying his mortgage and will have to move out of his house into a smaller apartment. I feel confident he will tell you walking around his smaller apartment beats not being able to walk around his bigger house. Edit: Many people have a false sense of security from a home. The only real security a paid off home provides is the equity (the access to cash). Homes are fairly inefficient domiciles, the taxes, maintenance and less efficient utilities minimize any real savings over renting. The path to homeless has nothing to do with a paid off house and a lot to do with not enough cash....See Moresealavender
3 years agoUser
3 years agosushipup1
3 years agoJulie Piehl
3 years agoGarden Music
3 years agolast modified: 3 years agoMrs. S
3 years agomaifleur03
3 years agoGarden Music
3 years agolove2browse
3 years agomaifleur03
3 years agosushipup1
3 years agofraker
3 years agorureadyinla
3 years agolittlebug zone 5 Missouri
3 years agolast modified: 3 years agorureadyinla
3 years agorureadyinla
3 years agoLindsey_CA
3 years agolove2browse
3 years agoDenita
3 years agolast modified: 3 years agoncrealestateguy
3 years agobry911
3 years agoncrealestateguy
3 years agoJeffrey R. Grenz, General Contractor
3 years agoshivece
3 years agobry911
3 years agolast modified: 3 years agomaifleur03
3 years agobry911
3 years agolast modified: 3 years agoLinda
3 years agomidcenturymodernlove
3 years agolast modified: 3 years agobry911
3 years ago
Related Stories
ARCHITECTUREStilt Houses: 10 Reasons to Get Your House Off the Ground
Here are 10 homes that raise the stakes, plus advice on when you might want to do the same
Full StoryHOMES AROUND THE WORLDStorybook Cottage Gets an All-Glass Kitchen
A showstopping addition to a traditional thatched cottage houses a contemporary kitchen
Full StoryEVENTSDesigners Get Creative in a D.C. Show House
With a historic home as a canvas and a worthy cause as an incentive, designers pulled out all the stops for the 2014 project
Full StoryHOUZZ TOURSHouzz Tour: Mexican Home Gets an All-Access Pass
Flush thresholds and ramps are just some of the universal design features that make this Cabo Pulmo home entirely wheelchair accessible
Full StoryCOMMUNITYGet a Bird's-Eye View of America's Housing Patterns
See the big picture of how suburban developments are changing the country's landscape, with aerial photos and ideas for the future
Full StoryDECORATING GUIDESHow to Get Curves in All the Right Spaces
Use the softening effect of curves to enhance and define your indoor and outdoor areas
Full StoryLIFEHow to Get Rid of Gnats Around the House
See swarming bugs in your plants or garden? Focus on the health of the soil and be naturally pest-free
Full StoryORGANIZINGGet Your House Back-to-School Ready
Support the Student in Your House With Shelves, Cubbies, Organizers and More
Full StoryLIFEYou Said It: ‘We Get the House a Present’ and Other Quotes of the Week
A Dublin fashion designer’s unique home, lazy bees, ‘The Birds,’ a steampunk cat system and more quirky sightings around Houzz this week
Full Story
kudzu9