Once you decide that you are ready to move and buy a new home, there are two different routes you can take. You can pay the house off upfront or take out a mortgage on the property and pay the rest off over a fixed term.
Both options will come with high costs, however, obviously buying a house with cash is the most expensive option. Paying with cash will mean that you pay the exact price of the property, whereas, if you take out a mortgage, you’ll be paying off the property over a long period of time.
If you can afford it, buying with cash is an excellent investment. Whether you’re planning to live inside the property yourself or you want to use it as a buy to let in Coventry, buying with cash can sometimes speed up your moving home process and potentially put you in front of others who are want to take out a mortgage.
If you’re approaching a property with a cash offer, it’s likely that you’ll have an advantage over applicants who are planning to take out a mortgage. One of the reasons why this is the case is due to reliability.
When a seller looking for a quick sale, they will usually choose a cash buyer over anyone. Having a cash offer often eliminates the chance of getting trapped in a property chain. A property chain occurs when a property is being sold to a buyer, however, they can’t move in yet as they’re still trying to sell their current home and sort out their mortgage. This process can repeat, resulting in homeowner after homeowner struggling to move out as they’re waiting for their buyer to move out.
Not being caught up in a property chain shows your reliability, you can progress straight through the affordability part of the process. As a mortgage broker in Coventry, we would still advise having a property survey carried out on your property. You won’t need a mortgage valuation though.
A quick and easy process of moving home in Coventry is what everyone wants. Making a cash offer often means that you’ll get through the process a lot quicker than had you taken out a mortgage.
You will not need a mortgage if you are paying via cash. However, as a mortgage broker in Coventry, we can safely say that on some occasions the mortgage process can be just as quick as paying by cash. It’s our job to provide a fast and friendly service in Coventry.
When you take out a mortgage, you’re essentially taking out a loan. You’re tieing yourself into a deal with 25+ years of potential mortgage payments. When you choose to purchase through cash, you won’t be making this commitment.
Also, you will not receive any interest. If you don’t have fixed mortgage payments, it’s likely that they’re going to increase slightly over time due to the internet on your mortgage. If you’re a cash buyer, this can never happen as you’ve already paid it all off.
If you don’t have the funds available to pay by cash, you’ll have to take the mortgage route.
If you would rather save your life savings than use it on an upfront property purchase, you could save money short term by taking out a mortgage instead. Depending on your credit score/file, getting a mortgage will usually require a minimum of a 5% deposit (5% of the property’s value).
Getting a mortgage will let you pay off your home in monthly instalments. Paying monthly will allow you to pay back a small amount at a time rather than the whole chunk at once.
If a property listing reads “cash buyers only”, we’d advise that you take caution with the property. This won’t affect you if you’re taking out a mortgage, you’re probably dodging a bullet anyway!
It’s likely that the property has been listed as this as it needs lots of repairs doing on it. Lenders won’t want to lend you money for a mortgage on a property that is in very bad condition.
Despite the fact that it’s not required, we always advise that you get a property survey carried out on any property, no matter which type of buyer you are.
Going into a cash purchase without help from an advisor may put you at a slight disadvantage to someone who has one by their side. Our mortgage advisors in Coventry will make the process as simple and as easy-going as possible.
It’s our job, as a mortgage broker in Coventry, to deliver you with fast and friendly mortgage advice service. Contact our mortgage team and we can assist you through the whole moving home process in Coventry.
Did you know that we can also help you make an offer on a property, arrange an AIP within 24-hours and perform a free affordability assessment on you?
Get in touch today for a free consultation in Coventry.