According to RealtyTrac, over 50% of home purchases in New York this year have been “all-cash” transactions. That’s an incredibly high figure! Many of these buyers were foreign investors. Others were Americans flush with cash, motivated by stiff competition on properties for sale.
Unfortunately, many of these buyers entered into these cash transactions without proper financial planning. Very often, liquidating investments to pay cash for a home results in a tremendous drain on their current and future wealth. After all, monies no longer invested have no growth potential. And a home’s future value is not influenced by whether the buyer paid all cash or whether they have a mortgage.
Cash buyers don’t think about mortgage financing. After all, if they find themselves needing a mortgage, they can think about it when the time comes. Right?
These buyers realize too late their need to pull money out of their home. Why too late?
Unless the mortgage is considered “acquisition debt,” the mortgage interest will likely NOT be tax deductible! For details, read my article, “The 90 Day Rule.”
Thankfully, Mortgage Wealth Advisors offers the Delayed Financing Mortgage. The Delayed Financing Mortgage provides a home-buyer with all the benefits of closing “All-Cash.” As long as the buyer obtains this mortgage within 90 days AFTER the purchase closing, the buyer can enjoy all the benefits of a purchase-money mortgage.
The Delayed Financing Mortgage provides both the real estate salesperson AND the home buyer the best of both worlds.
If you’re a buyer – or know a buyer – who is involved in an “all-cash” home purchase, let’s have a conversation to evaluate whether a mortgage makes financial sense. I’d be happy to discuss your situation with your CPA and Financial Planner. Together, let’s ensure your mortgage (or lack of one!) matches your cash flow needs and is complementary (rather than detrimental) to your financial goals.
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.
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