Owning a house comes with huge benefits. Imagine the freedom of not having to worry about rent. Yet, as a first-time buyer, the process of buying your own house can seem somewhat daunting.
But think about it, at the height of the pandemic, payment of rent proved to be the biggest challenge for most people.
Now here’s the issue, without a matching increase in income, it’s easy to understand why it’s difficult to keep up with the rising rent. Let’s take this example of Austin, Texas; the average rent is $1,539 which is a 9% increase from last year.
That’s not all.
With the rental moratorium having ended, landlords are more likely to take steps and evict those who can’t pay rent. For so many people, this is not a good position to be in.
Let’s just say, nothing beats the joy of having your own house. But how do you buy one if you don’t have the amount of cash needed? This article will tell you how.
First, let’s uncover the challenges of buying a new house.
Challenges of Buying a House
Buying a house is becoming arduous task and buyers are often forced to go to extreme lengths just to land a house. New home buyers are faced with three main challenges:
High competition in the real estate market
Lack of ability to pay cash makes your offer less competitive and less likely to win (cash offers are 4X more likely to win than finance-based offers)
Lack of knowledge and information on mortgage options, including various types of lenders out there today
According to a report by CNN, more than half of listed properties are sold within the first week. Competition is so high that buyers are not just offering cash, they are offering more than the asking price.
Buyers who do not have cash are at a disadvantage and usually fall short of winning bids in such a competitive market.
Most buyers who cannot afford to pay cash, are oftentimes unaware they can actually pay cash with the help of a cash mortgage company. As such, they rely on traditional mortgages which do not help much in such a case.
This is how to make a cash offer on a house and win competitive bids.
How to Make a Cash Offer on a House
A cash offer program guarantees the payment of cash to the seller. As the buyer, you start by shopping for a house. Once you’ve identified the ideal house, the whole process will take 5 easy steps.
Apply for a mortgage from a cash mortgage company (Hint: UpEquity offers a "Buy with Cash" program!)
Get underwriten and fully approved for a mortgage by the mortgage lender in a matter of days
Get your cash and make a cash offer on the house with your lender
The Seller accepts because...why wouldn't they?!
You walk away with the house of your dreams and a full mortgage
Yes, it's that simple.
How Is a Cash Offer Different from Other Mortgages
Having a pre-approval letter before making an offer is one of the primary concerns of a traditional mortgage. Approving the mortgage also takes longer. Now keep in mind that, if you’re not approved, you lose the house.
Here’s the point, a cash offer program is not like the traditional mortgage that takes 45 days to close. No, this program takes 21 days or less to close the deal. And the lender is able to underwrite you for a mortgage in record time, so there is almost no risk.
Besides being faster, a cash offer program is also safer since it makes use of modern technology to approve and underwrite buyers in a matter of hours. By the time you are making the buying offer, the mortgage is already approved.
Cash offer is a win-win for everyone. For you, it means higher chances of winning the house bid and less wastage of time. To the seller, it means instant cash and no contigencies.
To the realtor, it means:
A less strenuous house buying process
A happy buyer
Fast closing times and fast payouts
Making a Cash Offer on a House - Bottom Line
A cash mortgage company helps you buy a house, even when you don’t have the cash. Remember, cash offers are an excellent tool when you want to win a house bid much faster.
Second, entering into a mortgage earlier helps you complete the payment sooner. Partnering with a cash mortgage firm thereby boosts your prospects of becoming a proud homeowner.