Although there are definite plusses to buying your Boise dream house with cash, there are at least three opposing reasons why it would be prudent to at least think twice before writing that monster check:
- Taxes! The federal tax reform passed in 2017 may limit the interest tax deduction to $10,000, but that’s still a hefty
plus come tax time—one that cash buyers might miss. It has the effect of reducing a mortgage’s bottom line cost.
- Diversification. Investment counselors preach the advantages of diversification. If buying your Boise property with cash
means funneling the preponderance of your liquid assets into that one investment, it limits your freedom to explore all other avenues. If a business opportunity beckons, you might wind up borrowing against your home equity—in which case you could
have saved the trouble with a home loan in the first place!
- Leveraging your position. Even if you don’t make an all-cash offer, that solid bank balance will contribute mightily to
the way you will be viewed by lenders. The home loan terms you are offered should reflect that substantial financial standing. When historically low interest rates are offered, the financial consequences they embody are worth considering.
Of course, there are also some considerable advantages to buying your Boise dream house for cash. Chief among them is that many Boise sellers may choose cash offers over competing bids that require lender approval.
Whether you are looking to buy or sell, one aspect of what I bring clients is my professional experience in helping structure and evaluate successful offers. Call me!