What if you didn’t have a mortgage payment on your next house? It may sound a little unrealistic. But for a number of homeowners, it’s actually doable.
Nearly 3 in 10 homes purchased today are bought in cash, according to the National Association of Realtors (NAR). That’s far more than the pre-pandemic norm (see graph below):
So, how are so many buyers pulling that off? The answer is simple: home equity.
Back in 2020-2021, mortgage rates and the number of homes for sale were both at all-time lows. And that combination pushed home prices up, fast.
If you owned a home during that time, it likely gained significant value – maybe even enough to buy your next house in cash. NAR explains:
“. . . rising home equity has armed many existing homeowners with the financial leverage to make cash offers, allowing them to convert years of price appreciation into immediate purchasing power.”
Here’s why you may want to go that route yourself, if you have enough equity to do it.
1. Your Offer Becomes More Attractive
Sellers value certainty. And an all-cash offer removes one of the biggest unknowns in a transaction: financing. As Rocket Mortgage explains:
“Cash offers are attractive to sellers. Sellers often prefer to work with cash buyers if they can because they don’t have to worry about a buyer’s financing falling through at the last minute.”
In many markets, an all-cash offer can give you (click "Learn More" to finish the article)...
