There are significant differences between buying a home outright with cash and financing its purchase through a mortgage. Some of these key distinctions include:

Mortgage Qualification

If you are buying a house with cash, you can completely sidestep the often lengthy and exhausting process of applying for a mortgage. Those who do finance with a mortgage must meet with one or more potential lenders, complete applications and submit a long list of forms to determine whether or not they will qualify for a mortgage. A person buying with cash can purchase the property without worrying about his or her credit score or whether he meets a minimum level of income.


While you will still be responsible for some closing costs if you pay with cash, many of them are eliminated. For example, you will not have to pay a mortgage origination fee, underwriting fee or appraisal fee if you do not want to have the value of the home independently assessed. Additionally, the closing period for a cash transaction is often faster than it is when using a lender, often completed within 30 days or less.

Tax Consequences

In most instances, a buyer’s mortgage interest payments are tax deductible, which results in a lower tax liability for the buyer.


Cash buyers can opt whether or not they wish to insure their home and for what premiums. Mortgage buyers do not really have this choice as the lender will require specific insurance to protect its own interest in the property.

Tying Up Funds

When a person purchases a property with cash, the cash is gone. A person with a mortgage may have greater access to funds because the home is only costing the mortgage payment and other related payments. If a person is purchasing a property as an investment, it may not make financial sense to skip paying mortgage interest when the buyer could otherwise invest in something that would yield a higher return.

If you are interested in buying or selling property, call Isabelle Andrews at 305-546-5421, Alba Biondi at 305-323-2595, or email us at

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