for first time buyers, with not so stellar credit. if i can pay for the whole thing in one fell swoop, why is everyone advising me to take a mortgage?
wouldnt it be better to buy it outright? then i wouldnt have to sweat coming up with a monthly sum- a mortgage doesnt seem so different from having to come up with a rent to me
2006-10-20 16:29:30 · 9 answers · asked by justsomedumbgirl 3 in Business & Finance ➔ Renting & Real Estate
It helps your credit rating to have a history of mortgage payments being made. Yes it's better financially to buy it up front. It saves you a ton of interest. Being prequalified helps you know what you can afford and it makes the seller more willing to deal with you because the money is there, as opposed to most people who negotiate based on the contingency that they will get approved. It shows you have your act together and are serious about buying a home.
2006-10-20 16:36:30 · answer #1 · answered by dantheman_028 4 · 0⤊ 0⤋
Wouldn't you rather own something for that monthly payment?
By prequalifying you know how much you're going to be able to finance. That, with whatever you already have in cash to pay down, is how much you can pay for a house.
That helps you to know what price range you can afford so that you don't waste your time looking at or considering homes that you can't buy.
It also helps expedite the whole purchase process and cuts down on the anxiety of whether or not you're going to qualify to buy a house that you really want.
Good luck.
2006-10-20 16:50:53 · answer #2 · answered by KIT J 4 · 0⤊ 0⤋
Pay cash if you wish, but you are tieing up your assets in a big way. They will no longer be liquid (accessible). ouch!
Also, when people tell you that interest is tax deductible, geesh, you can only deduct 28% of what you paid out. Not a great business decision.
Good advice is one that I read here, to finance a huge portion of it to help straighten out your credit. Most mortgage companies won't finance less that $30,000.
Mortgages right now are mostly ballooned, interest rate can change in 5 years, depending on the going rates. Bargain for a lower rate, then pay it off after the 5 year balloon expires. Oila! Good credit rating!
2006-10-20 18:04:23 · answer #3 · answered by Barbara 5 · 0⤊ 0⤋
Hello...i have a credit score of 700 and my hubby has one of 750...we are 23 and 25.i have done banking 4 years..and am now taking real estate school and will be licensed in aprox 2 months or so....
.now then
In getting pre-qualified,it will help you out in a few ways(#1.you will know what price range to look for...what if you find a house costing 100,000 and LOVE IT...but the bank only approves you for 50,000 and you have already made an offer on the home...)(#2.believe me,it save time and paperwork for the bank or mortgage company your going through...as well as the realtor you use when finding a home)#3it also makes it easier on your realtor...it also proves your serious and the contract wont fall through on the home.......
Also,it would be way better to buy outright if this is an option for you...interest rates are aprox 6percent here in tn right now...and you would save THOUSANDS ...If you paid for a 100,000 home out right...instead of setting it up on 30 years..you would have spent around 280,000 by the end of that mortgage...thats a saving of 180,000 just by buying outright!!!!WOW!!But,having a pmt helps your credit...maybe consider putting a HUGE down payment on your home...say 80percent...and just finance 20percent of your home....???
In general it makes it easier on EVERYONE.if you decide to go through a bank..to get preapproved,i advise it..plus that way it wont gets your hopes up,just to let you down....and the seller is more willing to negotiate with you too if they know you can get the $$$
i hope this helps...
2006-10-20 16:44:34 · answer #4 · answered by Anonymous · 0⤊ 0⤋
interior the prequalify letter it skill that with the information they have top now, you would be waiting to get a loan. Getting pre-approval is bigger in case you are attempting to make an grant on a house. If the pre-qual letter says you are able to qualify for X volume of a loan with putting 20% down, then you definitely might desire to place 20% down... if no longer, you will get away with much less. comprehend which you're paying a lender once you get a loan by way of them and you will ask them as many questions as you prefer/prefer to. Be great recommended abotu the loan and determining to purchase techniques so which you dodge any issues interior the destiny. as quickly as you connect up the dotted line you are able to no longer say "I didnt know" as a competent clarification for some style of subject.
2016-11-24 20:41:22 · answer #5 · answered by Anonymous · 0⤊ 0⤋
If you can afford to own a home (primary residence) outright, then I advise that you do so and seek other tax shelters and investment revenues.
The difference between rent and a mortgage is the tax advantages and the fact that you own property.
Regards
2006-10-20 16:55:07 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Interest you pay on a mortage loan is tax deductible. This can help you significantly when its time to fill out those dreaded 1040's. Getting prequalified for a loan is helpful in knowing how much house you are able to afford, and lets a seller know that you are able to purchase their home when making an offer.
2006-10-20 16:35:21 · answer #7 · answered by Renee 3 · 0⤊ 1⤋
No--takes ALL the guess work out of it for the buyer!
Its like you standing there with $175,000 in hand!
Buying outright is great--but build credit less than paying over time! shows you can keep a payment schedule!
2006-10-20 16:39:13 · answer #8 · answered by f4fanactic 6 · 0⤊ 1⤋
If you can pay cash, by all means do so!
2006-10-20 17:43:53 · answer #9 · answered by Bostonian In MO 7 · 0⤊ 1⤋