Issue link: https://www.ifoldsflip.com/i/1345129
Q:Giventhatinterest ratesaresolow,does itmakesensetobuy realestatewithcash? Wehavetheabilityto dothat;wehaveno otherdebtsbutwonder ifanall-cashpurchase isagoodstrategy. A:Therehavebeen severalreasonswhichhave traditionallymadeall-cash financingattractive. First,youdon'thave toworryaboutlender qualificationstandards. Ifyouhavethedollars, youcansimplybuya propertyoutright. Second,withouta lender,youcanavoid manyloan-relatedclos- ingcosts. Third,youmaybe abletogetabetterprice andtermswithacash offerbecausetheseller canbecertainofyour abilitytoclosethedeal. Fourth,youcan avoidmonthlymortgage payments. Fifth,youcanavoid mortgageinterestcosts thatadduptobig money.Forexample,if youborrow$250,000 at3%,thetotalinterest costafter10yearswill be$66,531. Sixth,itusedtobe thatfinancingrealestate waseffectivelyencour- agedbyfederaltaxrules. Mortgageinterestcosts withincertainlimits havegenerallybeen tax-deductible.This meansthattaxbenefits canoffsetinterestcosts. However,underthe TaxCutsandJobsAct of2017—the2017tax reformmeasure—larger standarddeductions becameavailablewhile itemizeddeductions werecapped.Formost borrowers,itnowmakes moresensetotakethe standarddeduction, andthatmeanswhile mortgageinterestcan bededucted,intheory, it'snotapracticalchoice formosttaxpayers.For details,speakwithatax professional. Seventh,inflation hasgenerallybeenthe friendofmortgage borrowers,allowing themtopayofffixed- rateloanswithcheaper andcheaperdollarsover time.However,inlate 2020theinflationrate wasrunningat1.2%, accordingtoTrading Economics,alowlevel. TheNationalAssoci- ationofRealtors(NAR) saysthetypicalfirst- timebuyerpurchases with7%down,but 17%ofallfirst-timers managetobuywith allcash.According toNAR,thetypical purchaseismadewith 16%upfrontamong repeatbuyers,but12% ofallexisting-home buyerspurchasedwith nomoneydown. Whilethereare severaladvantagesto all-cashpurchases, therearealsonegatives. Ifyouhavethe dollars,it'seasyenough toputcashintoahome butnotsoeasytoget itoutunlessyousell orfinance.Ifyouhave higher-costdebtsuch ascreditcardbills,the moneymightbebetter usedtoeliminatesuch obligations.Lastly,the moneymightbebetter spenttostartabusi- ness,buyadditional property,payforcollege, etc.,dependingonyour personalpreferences. There'snoanswer thatworksforeveryone. Forthatreason,itcan makesensetoreview theprosandconsofan all-cashpurchasewitha fee-onlyfinancialplan- ner,someonewhocan lookatyouroverallindi- vidualsituation. Emailyourreal estatequestionstoPeter Milleratpeter@ctw features.com. Since rates are low, is an all-cash real estate purchase a smart option? MarketWatch By Peter G. Miller LGI Homes frompage1 Buying new construction amid scarce inventories acoveredfrontporch andbackpatioperfect forenjoyingthecooler weather. EveryhomeatSum- mitatLibertycomes outfittedwiththestyl- ish,designer-selected upgradesfoundinLGI Homes'CompleteHome Pluspackage.Stainless steelkitchenappli- ances,gleaminggranite countertops,oversize woodcabinetrywith crownmoldingdetail andfaux-woodblinds installedonalloper- ablewindowsarejust afewoftheremark- ableupgradesfoundin everyhome.Inaddition, homesatSummitat Libertyareconstructed withenergy-efficiency inmind.Everyhome comeswithdouble- pane,Low-Evinylwin- dows,aprogrammable thermostatandsolar panelsincludedatno additionalcost.Homes atSummitatLibertyare readyforyoutomake memoriesinfromthe momentyoumovein. Livinglifetothe fullestiseasyatSum- mitatLiberty.Inside thisneighborhood homeownerswillsoon enjoya$9million amenitycomplex,Club Liberty.Scheduledto openthisyear,Club Libertyisa4.5-acre entertainmenthubfor residentstoenjoy.At ClubLiberty,you'll findastate-of-the-art fitnesscenter,aresort- stylepoolandpool house,communitygar- den,bocceballcourts, TheRanchHouseand theEventsBarn.The RanchHousewillserve asthemaingather- ingspaceshowcasing multiplemeetingareas, theLibertyHouseCafé andalargecovered patiowithafirepit. TheEventsBarnwill serveasasecondary spacethatcanbeused forlargereventsand ishometoabusiness lounge,artstudio,and craftroom.Justoutside theEventsBarnisthe communitygardenand pottingshed.Located justashortwalkfrom ClubLibertyistheRac- quetCenter.TheRac- quetCenterisopenand readyforresidentsto enjoy,showcasingtwo tenniscourtsandfour pickleballcourts. Whywait?Fulfill yourdreamlifestyle today.SummitatLib- ertyhasquick-move-in opportunitiesavailable. Toaccommodatebuy- ersduringthistime, theSummitatLiberty informationcenteris openfortoursbyap- pointmentonly.To learnmoreorschedule atour,pleasecall(877) 899-1091,Ext.284,or visitSummitAtLiberty. com. Contentprovidedby LGIHomes By Marilyn Kennedy Melia CTW FEATURES Significantnumbers ofbuyerssuddenlywant anewhome.Pending salescontractsonnew constructionswelledto recordnumbersinlate 2020. Aperfectstorm oflowinterestrates, favorablebuyerde- mographicsandan increaseddesirefor suburbandevelopments isfuelingdemand, notesRobertDietz, chiefeconomistatthe NationalAssociation ofHomeBuilders.But shallowinventoriesare makingitchallenging forpurchaserswhode- finetheperfecthomeas pristine. And while everyone knows how to scout for existing homes, finding a yet-unbuilt house or knowing just where reliable builders have good offerings is more mys- terious. Enlistanagent Somerealestate agentsspecializeinwork- ingwithbuilders. "Mostdon'thave thisexperience,"says JohnMyersofMyers &MyersRealEstate inAlbuquerque,New Mexico. CarlaGormanof Baird&WarnerinChi- cagotracksconstruc- tionpermitstouncover developmentearlyand saysclientsoftenfind herfromherZillow profile. JeffBenachofbuilder LexingtonHomesalso suggestsresearchingne- whomesource.com. Pricesrise, discountsfade Incentives,likedis- countsonextras,are largelyunavailablein thismarket,andde- mandispushingup prices,Dietznotes. Unlesshomesaren't selling,buildersdon't negotiateprice,Benach pointsout. Butagentscanassist buyersinotheraspects, suchassitelocation andfloorplan,saysJeff StricklerofWallaWalla Sotheby'sInternational RealtyinWashington state. Researchthebuilders Withnewconstruction demandcomescompeti- tionbetweenbuilders forqualifiedlabor,notes authorandattorneyIlona Bray. Talktohomeown- ersinexistingdevelop- ments,seekingopinions onthatbuilder'sreli- ability,sheadvises.You canalsocheckwiththe nonprofitHomeOwners forBetterBuilding. Ifthehomeownersas- sociationisalreadyinthe handsofexistingowners (thedevelopercreatesthe associationinitially),talk toownersthere,sheadds. Inpurchasing,"ask- ingforspecificsaboutthe buildingdateisimpor- tant,asisputtingconse- quencesintothecontract forfailuretomeetthat date. Don'tmakethe finalpaymentuntilthe placeisfinished." Over 21 years experience and 5 star Yelp reviews Bayview Residential Mortgage 51 E. Campbell ave #110 Campbell, CA 95008 CA Broker DRE#01498198/ NMLS#329189 Call today for rate quote! Rob Heath 408-482-8080 CA DRE#01241953/NMLS#319548 Apply at my personal secure loan application at www.excellentmortgageloan.com Product Rate Points Fees % Down APR 30 Yr Conf. Fixed 15 Yr Fixed 5 Yr Jumbo ARM 30 Yr Conf. Jumbo 3.125 2.75% 3.25 3.50 0.000 0.000 0.000 0.000 $0 $0 $0 $0 20% 20% 20% 30% 3.125% 2.75% 3.67% 3.50% JUMBO REVERSE MTG, 5* Yelp reviews. 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