Home buying in ALL CASH with NO Mortgage!

[Konebhar6]

2 hours ago, Sonu_Patel said:

you bought a good point... 

Interest rate is more than 7% now.. calling @gudboy 

Antaa banu undi kani..You have not factored in Housing market crash. You lose your liquidity and opportunities to invest in case of a cash and you are losing on your principal as well.

[yemdoing]

2 hours ago, pandu123b said:

seller ki edaina okate kada,

vadiki cash ela ina vastadi

neeku special ga all cash ki offers enduku?

No sellers prefer cash offers as chances of closing the deal is higher with cash offers . 
 

For various reasons some people have to back out because of loan issues . Small percentage fall under this category but still sellers prefer cash . 

[Thokkalee]

49 minutes ago, Konebhar6 said:

Antaa banu undi kani..You have not factored in Housing market crash. You lose your liquidity and opportunities to invest in case of a cash and you are losing on your principal as well.

Even in that scenario, he won’t be paying any interest.. so he will still come on top when compared to someone who is paying interest.. on a 30 yr loan, even after paying mortgage for 5 years, you won’t even make a dent on the principal amount.. most of it goes towards interest.. 

for eg: if you take a 500K loan @7%, after 5 years you pay $170K towards interest and 30K towards principal… so if OP buys all cash, he will still be on top if he is able to sell his home for the buying price ($500K)… but for a person who took a loan, he has to sell his home for $670K to break even.. 

[Gobi]

4 hours ago, Sonu_Patel said:

What are the perks that builders offer for CASH buyers ? 

please share if any one bought home with out Mortgage.

Already have 2 houses worth $2M paid only cash to buy them 

[idibezwada]

3 hours ago, Variety_Pullayya said:

simple logic...if you are smart to find an investment that will give more that 6-7% in return , then dont pay cash.

if money is sitting in bank and not sure where to invest , then go for a cash buy.

 

i would put money in two different homes and give one home for rent and try rotating the rent money for mortgage.

sonu annake salaha cheppe antha pedodivi ainava...

[geeni83]

Chin ese people all cash tho ne kontaru

[SaradaChinnodu]

5 hours ago, Sonu_Patel said:

What are the perks that builders offer for CASH buyers ? 

please share if any one bought home with out Mortgage.

Anna aithey ready ayinav annamata cash tho buy out cheyaniki final ga.. @Sonu_Patel

[Pandubabu]

6 hours ago, gudboy said:

stupidest thing someone will do AFAIK

Not stupid if the interest rate is touching 7 unless you don't have emergency reserves .. there are not any products out there that give 7% fixed returns.

[Konebhar6]

4 hours ago, Thokkalee said:

Even in that scenario, he won’t be paying any interest.. so he will still come on top when compared to someone who is paying interest.. on a 30 yr loan, even after paying mortgage for 5 years, you won’t even make a dent on the principal amount.. most of it goes towards interest.. 

for eg: if you take a 500K loan @7%, after 5 years you pay $170K towards interest and 30K towards principal… so if OP buys all cash, he will still be on top if he is able to sell his home for the buying price ($500K)… but for a person who took a loan, he has to sell his home for $670K to break even.. 

You haven't considered what he could do with the cash in hand if not taken a loan. Even if he keeps in bank at current rates, 500K could generate 25K per year in bank interest. He could get better results if he invests in markets or even in real estate if or when it crashes. 

[Konebhar6]

4 hours ago, geeni83 said:

Chin ese people all cash tho ne kontaru

Oka sari vallatho kurchoni .. details lagali..

Manakanna mudurulu ... Oka chinese friend undevadu office lo .. they do some amazing things to make money..

[Thokkalee]

19 minutes ago, Konebhar6 said:

You haven't considered what he could do with the cash in hand if not taken a loan. Even if he keeps in bank at current rates, 500K could generate 25K per year in bank interest. He could get better results if he invests in markets or even in real estate if or when it crashes. 

We are talking about a scenario where the housing market goes down.. and I am pretty sure that any other investment will also yield less returns or no returns if the market goes down except for bank savings accounts (CD, etc) which are paying around 5-6% now… also with a mortgage loan, the interest is front loaded… 

[Konebhar6]

45 minutes ago, Thokkalee said:

We are talking about a scenario where the housing market goes down.. and I am pretty sure that any other investment will also yield less returns or no returns if the market goes down except for bank savings accounts (CD, etc) which are paying around 5-6% now… also with a mortgage loan, the interest is front loaded… 

My point exactly. IF the market goes down, cash is king. Lots of opportunities will come up to invest in cash and reap benefits later.

I am not a big fan of buying a home with Cash in USA. Its a diff case in India. You can do a lot with cash in USA. Just my opinion.

[Thokkalee]

6 minutes ago, Konebhar6 said:

My point exactly. IF the market goes down, cash is king. Lots of opportunities will come up to invest in cash and reap benefits later.

I am not a big fan of buying a home with Cash in USA. Its a diff case in India. You can do a lot with cash in USA. Just my opinion.

This is a hypothetical scenario anna.. 600-1M cash enta mandi daggara untaadi? Also as the market is all priced up, even if they have that much cash, there are very few good investment opportunities now.. when someone doesn’t have a primary home, it makes sense to buy that first.. 

[Konebhar6]

7 minutes ago, Thokkalee said:

This is a hypothetical scenario anna.. 600-1M cash enta mandi daggara untaadi? Also as the market is all priced up, even if they have that much cash, there are very few good investment opportunities now.. when someone doesn’t have a primary home, it makes sense to buy that first.. 

You will be surprised on how many people have that much of cash. Recent years lo RSU's and housing market, stocks people made a lot of money. People stopped sending money to India realizing its not practical to go back.

You can keep the cash in Savings Account, CD's or index funds. When market crashes other opportunities arise.

However, I agree on your point about primary housing. Nothing can replace the feeling of a house ownership. Economics cannot justify nor take these into consideration.

[FrankJScott]

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