Real Estate Tips & Resources
What's Better: Buying a House with Cash vs Mortgage?
If you've been looking at homebuying in the past few years, you know firsthand that great houses are getting snapped off the market in a matter of days, and sellers often have had multiple offers to choose from. Submitting the best offer in a seller's market can be challenging if you're stuck with traditional financing. And even in a buyer's market, you need to be leery of overpaying. But whether it’s a buyer’s market or seller’s market, there's one thing that can set your offer apart and be a win-win for both parties. The answer is: a cash offer. So, when can and should you consider buying with a mortgage vs cash? What are the differences between financed and cash offers? And is it possible to buy a house with cash and then secure a mortgage on the house afterwards? Here's what you need to know about the pros and cons of mortgages vs cash. Buying a house with a loan vs. cash Mortgages are the common way for Americans to pursue the American Dream of homeownership for a reason. For a long time now, they have been the only way for the vast majority of homeowners to be able to afford a house because most people can't afford to buy their first home with savings alone. A home loan allows them to make payments over time. Here are other reasons why mortgages are popular: When mortgage rates are low, like they are now, they are considered cheap money. The cost of borrowing is low compared to the benefits of owning a house faster. Buyers can build home equity without having to pay in full upfront.Spreading the cost of the home over 15 or 30 years into affordable monthly payments frees up money to budget elsewhere (including investing in other areas, like retirement plans or emergency funds). Making consistent payments on a real estate asset is a great way to build credit. There are tax-related benefits to a mortgage. So why wouldn't you want to buy a house with a mortgage? Some people want to avoid debt no matter what.Some people cannot qualify for a mortgage, for various reasons.But perhaps the biggest issue working against mortgages in the "cash vs. mortgage" debate is that 21% of deals that are delayed or fall through due to “issues related to obtaining financing,” according to the National Association of Realtors. Home sellers prefer cash offers because they're less likely to fall through. In other words, if your offer includes a financing contingency, your offer might be rejected if a competing offer doesn't. Cash offers are more attractive to sellers, but why? And what can you do if you don't have enough liquid to pay for a house with cash? Don’t take the pre-approval bait Many first-time homebuyers assume that their financing is secured if they get a pre-approval letter from their lender. But that's not usually the case. When taking the traditional mortgage route, you’ll provide a loan officer with some simple, surface-level documentation, including your credit report, proof of income and any assets or debts you may have. And...voila! In as little as 24 hours, you’ll receive a pre-approval letter stating you’ve qualified for a certain loan amount; BUT with one caveat — with a traditional lender, that letter is not a commitment that you’ll actually receive the loan. A pre-approval gets you in the door to make an offer, but the actual approval process — in traditional underwriting — doesn't begin until the house goes under contract and the underwriting process is initiated. For sellers, agreeing to an offer in this scenario is pretty risky, as a pre-approval doesn’t provide proof that you’ve secured the financing needed to purchase the home. Once your offer is accepted, a traditional mortgage lender will move you into underwriting. A lot can happen between the time you’re pre-approved and finally receiving the green light from your lender. An underwriter will perform a thorough assessment of your finances, and if you’re unable to meet certain requirements or your financial picture changes, your loan could be rejected. Keep in mind, this can happen mere days before you expect to sign the final paperwork — meaning both you and the seller have already invested in inspections, appraisals and more. Imagine thinking it’s a done deal? Your offer won. You were already envisioning yourself inside the home. And...poof! Just like that, everything falls apart. Even the seller and their real estate agent have to start back at square one when financing falls through. Why is a cash offer better than a mortgage? Everyone’s heard the saying, “cash is king.” But, when it comes to a real estate transaction, what the phrase really means is: cash equals certainty. Nothing makes an offer sizzle like proof of funds from day one. Where a pre-approval says, “There will probably be money in the bank a month from now,” proof of funds is actual money in the bank — showing the seller you have the cash to back up your offer. Sellers look for cash offers because they remove uncertainty from the equation. As a homebuyer in a hot real estate market, cash is the key to making your offer stand out from the crowd and winning your dream home. Plus, it puts more negotiation power in your hands. According to national statistics, a cash offer is four times more likely to win in a multiple offer situation over a traditional mortgage offer. What’s more, all-cash sales, which now account for 36% of the housing market, are highly attractive for both buyers and sellers because they speed up the closing timeline. What takes traditional mortgage lenders an average of 47 days to complete, can take 14 days or fewer with cash. But the big question remains: how does the average homebuyer afford to make an all-cash offer? And even if you had cash in the bank to put down 100% of the selling price, what about all those advantages to a mortgage we talked about earlier? It turns out that everyday homebuyers can buy a house with cash while still getting all the advantages of a mortgage. Here's how it's possible to make a cash offer with a mortgage Homebuyers now have the opportunity to secure the funds needed to make an all-cash offer on a home, backed by an Accept.inc mortgage. Accept.inc was founded on the belief that anyone who qualifies for a mortgage deserves an equal shot at winning — a belief that the best homes, school districts, and neighborhoods shouldn’t be reserved exclusively for buyers who have hundreds of thousands or millions of dollars in their bank accounts. We take the traditional mortgage process and flip it on its head, performing all the underwriting upfront. Yes, you can get a pre-approval quickly to immediately begin the house hunt in earnest, but the magic begins right after with our Cash Approval process. Our Cash Approval can be completed in as little as 72 hours and provides borrowers with the ability to shop the market with both confidence and cash in their pocket. Knowing your home-buying power is guaranteed on day 1, not day 31, is a complete game-changer. And this isn't delayed financing, where a buyer still has to have all the cash up front to buy the home on their own. In that scenario, the buyer brings their own cash to the table, and then gets a loan against the home afterwards, with some risk and potentially less favorable rates. With an Accept.inc loan, you buy the house with our cash and pay it back over time through a mortgage. You no longer need to decide whether you should buy a house with cash or a mortgage. Now you can have your cake and eat it too. By becoming Cash Approved™, you’ll be able to submit an offer with 100% certainty that the cash will be available at closing AND you can pay back the borrowed funds over time just like a normal home loan. Getting started is easy, and it doesn’t require any additional costs or fees. We offer competitive rates and can improve your chances of scoring your perfect home by 4X. To get the ball rolling, simply begin the Cash Approval process with this simple form.
Kelly K. | Nov 23, 2021
What's Required to Make A Cash Offer in Real Estate
If you shopped for a home in 2020 or 2021 and felt like you were competing against a lot of cash offers, it wasn't your imagination. In 2020, a whopping 36% of home sales were paid in cash! What are the pros and cons of this approach? And how, exactly, do you make a cash offer in real estate? There are two ways a buyer can make a cash-only offer on a house. We're going to let you in on a little secret about how anyone who qualifies for a mortgage can also make an all-cash offer on their dream home. But first, let's start with the well-known way. Option 1: Have enough cash on-hand to pay for property outright Traditionally, the only way to make a cash offer on a house was to have cash in-hand. Those who could afford to do that in a high cost of living (HCOL) city fell into two camps. Individual buyers who had a lot of cash -- the exceptionally wealthy, those who inherited money or had a generous rich relative, or those who just sold their home and could roll the proceeds into a new home purchase. And then there are individual or corporate investors. Investors buy real estate in order to flip the property and turn a profit. Ever wonder about those signs on the side of the road that promise fast cash for your ugly house? Yeah, those are a subset of house flippers. Investors don't plan to live in the neighborhood and are motivated by making a big, and fast, profit. To bring sufficient cash to the table, these buyers may have their own investors backing the deal or group of deals. Or they may have cash from a recent sale or a cash-out refi from a previous investment property. Investors prefer the process of buying real estate with cash to be fast and streamlined: find a house that looks like it'll be profitable, make an offer (usually without a real estate agent), use a lawyer to finesse the contract, close the deal, wire the money to the seller, and start the flipping process. Let's put aside investors and their financing strategies and focus on the regular people who are trying to buy a home to live in and enjoy. Even if you can pay for a new home with cash upfront, should you? The disadvantage of paying cash for real estate is losing liquidity or tying up money that could be more productively invested. Today’s low-interest-rate environment means financing a home purchase is still a financially sound strategy. On the other hand, if you go the route of a traditional mortgage, you lose the bargaining power of a cash offer. After all, sellers prefer cash buyers because they aren't subject to the bank's financing and appraisal contingencies (and all the other reasons a traditional loan can fall through or drag out). Sounds like a dilemma. But there's a second option that solves this problem for those who have the cash but prefer the flexibility of a longer term home loan … an option that also gives a leg up to those who can't put 100% down but who qualify for a mortgage. Option 2: Work with Accept.inc to buy with the power of cashHow We Enable You to Make Cash Offers The good news for everyday individuals and families who dream of buying a home is that it's possible for regular people to make a cash offer, just like investors and the wealthy. The secret lies in partnering with Accept.inc. As a “technology-enabled lender,” we're making it easy and fast for homebuyers to submit all-cash offers, for no additional fees. The process for becoming a cash buyer with Accept.inc is similar to the mortgage process you already know and don't love ... but without the slow, cumbersome, and painful parts that cause you heartburn. Here's how it works: First, we start by letting you know how much you pre-qualify for so you can start looking for your dream house right away; simultaneously, we begin the Cash Approval process. If you qualify, you'll get Cash Approved in days, not weeks or months. Cash Approval is not the simple prequalification you'll get with traditional lenders, which can fall apart during the end of the offer process; once you're approved, you can start making cash offers with confidence that your financing won't fall through! Once you find a house you want to buy, we run a quick value check on the home. Then your agent works with our cash transaction specialist to finalize the offer letter. The seller is offered cash for their home and shown proof of funds. Why You Should Consider Making a Cash Offer In today's real estate market, a cash offer is four times more likely to win than an offer with a traditional mortgage. Even better, the power of cash is so great that you are in a better position to negotiate price and terms. How much negotiating power? Would you believe Accept.inc buyers get an average discount of $11,545 off the highest offer in a bidding war? It's true -- that means their cash offer won by offering nearly twelve thousand dollars less than the highest bid! And in a non-competitive situation of 2 or fewer offers, our cash buyers saved even more -- they paid an average of $15,979 below list price on their home purchase in Denver. That's more money back in your pocket or more equity on your net worth balance sheet from day one. And who would say no to that? Once the deal is done, you begin paying back the loan just like a regular mortgage. It's fast and convenient. And it costs you nothing extra. All the pros of making a cash offer in real estate. None of the cons. Because it turns out that having cash isn't a key requirement for being a cash buyer. Pretty cool, don't you agree? Learn more about the benefits of buying a house with cash. And when you're ready to take the next step, apply to become Cash Approved™.
Kelly K. | Nov 23, 2021
How to Find the Best Mortgage Lender in Denver
You’ve scoured the internet, bookmarked layouts in Architectural Digest, binged every Denver-based episode of House Hunters, and crafted a wish list of features for your future home. But, what about your wish list for finding the right Denver mortgage company to make that dream a reality? Buying a house is probably one of the biggest financial investments you’ll make in life. And having the right lender in your corner is an essential piece of the homebuying process. Don't settle for anything less than a great experience. Finding the best mortgage lender is more than just securing the lowest interest rate possible. Here’s a look at how the right mortgage company can help you win in the Denver housing market. What to look for in a Denver mortgage lender While the mortgage process may appear to be similar across lenders, not all mortgage companies are the same. Key differences include fees, the level of customer service you'll receive, how quickly the underwriting process can get done, and whether the lender can help you make the most competitive offer possible -- all these points make it worth your time to do your research. What you should expect from a mortgage lender: Great mortgage rates Flexible mortgage optionsNo hidden fees or "gotchas"Easy to work withFast underwriting process So how do you choose a lender? From conventional banks and credit unions to mortgage brokers and nonbank mortgage lenders, there are many options on the market today to consider. Long gone are the days when your only option was the local bank down the street. And while you shop around, remember that a competitive interest rate is a given but not your only consideration. For instance, it’s important to choose a lender that is reputable, responsive, exercises transparency, and offers top-notch customer service — a lender that drags their feet and prevents you from closing quickly can cause you to lose out on your Denver dream home. Like your real estate agent, your mortgage lender should be like a partner in the process. Buying a house in Denver should be a joyful experience; make sure your lender will set you up for success. Discover an innovative new mortgage process According to the Wall Street Journal, 68.1% of all U.S. mortgages issued in 2020 came from nonbank mortgage lenders, up from 58.9% in 2019. Homebuyers are getting wise to the fact that they don't need to rely on old-fashioned, traditional banks to help them buy their dream home. Yet, most would-be homeowners are not aware that there are alternatives to old-fashioned, traditional home loans, also. They don't realize that buying a house doesn't need to follow the same traditional (and slow) process their parents used when they bought a home -- a process that, frankly, doesn't work well for buyers or sellers. So what's the alternative? Accept.inc has turned the mortgage process on its head with an innovative loan product that allows buyers to make strong cash-only offers, with unmatched speed-to-closing and no delays due to financing and appraisal contingencies. Accept.inc is the first and only iLender, or a “technology-enabled lender”, which has facilitated hundreds of millions of dollars in real estate purchases between ordinary homebuyers and sellers in Denver to date. Waiting to see if your lender will give your loan the green light of approval after your offer has been accepted? Nerve racking. Having the rug pulled out from under your feet and your dream home ripped away at the last moment all because of a financing contingency? Heartbreaking and, frankly, unnecessary. Seriously, it’s the 21st century, there has to be a better way. And there is. At Accept.inc, we’ve flipped the script, performing the underwriting process upfront. This allows qualified buyers to become Cash Approved™ before they ever make an offer on a home. So, what exactly does that mean? As a buyer, you have proof of funds when you make your offer. Congrats, you're now negotiating with the power of cash. See how the right lender makes all the difference Lose. Rinse. Repeat. That doesn’t exactly sound like a formula for success to us. By working with the right Denver mortgage lender, you can hop off the merry-go-round of failed offers and improve your chances of scoring a win. Picking a proven mortgage lender who gets deals done and who comes recommended by trusted real estate agents can protect you from falling victim to bait-and-switch ads or brokers who forward your information to anyone and everyone willing to buy leads. You’re not just buying a product, you’re looking for a partner who will work alongside you to get the deal done. In today's housing market, you want to pick a lender that’s innovative, providing a creative and strategic solution that moves beyond the traditional mortgage process. Because let’s face it, the traditional mortgage process is stressful for both buyers and sellers. Historically, making an all-cash offer meant a homebuyer didn’t need to secure a mortgage. This was once reserved solely for investors, developers, and the rare one-percenters who had the capital needed to purchase a home outright. Today, however, we’ve leveled the playing field, providing everyday homebuyers with the proof of funds needed to make a cash offer. Accept.inc's Cash Approval process can be incredibly powerful, increasing your chances of making a winner offer by 4X. Why? Because the sale no longer depends upon your ability to successfully procure financing after a seller has already accepted your bid. The financing process is straightforward, with no strings attached and no hidden fees. In fact, there are no additional fees for an Accept.inc cash offer beyond the customary fees of any traditional mortgage. Let's recap. Great mortgage rates? Check. Accept.inc’s mortgage rates are very competitive. Flexible mortgage options? Absolutely. We offer a variety of financing options. No hidden fees? Guaranteed. Our cash offer service costs the same as a traditional mortgage. We don't add any additional fees or points when compared to a traditional mortgage offer. Easy to work with? You bet. We pair our approved buyers with an Approval Specialist, so that they have someone to personally walk them through the process. We also have a Cash Transaction Specialist who works closely with the buyer's agent to submit the offer. Check out some of our buyer reviews and agent testimonials for more proof. Helps you make the best offer? Here's another area where Accept.inc really shines! Because we give you the ability to make a cash offer, you're more likely to win in a bidding war, as well as negotiate the best deal. Sellers know that cash offers close faster, with no risk of offers falling through due to financing contingencies. Making a strong offer in the competitive Denver housing market Year over year, the Mile-High City is named one of the U.S. News & World Report's best places to live. From the area’s thriving economy to its vibrant culture, great school districts and a slew of outdoor activities, it’s no surprise the population has seen an estimated 21.2% increase in the last 10 years. It’s no secret either that the Denver housing market is competitive. Even as the hot market begins to cool, like any other metro area, it still comes with a higher-than-average cost of living. And while the median household income in Colorado is above the national average, any type of cost savings a homebuyer can secure is incredibly valuable. Especially when having to contend with multi-offer scenarios. When you're making a cash offer on a house with an Accept.inc mortgage, you have more negotiating power. Just like the lowest mortgage rate isn't the only consideration for buyers when choosing a loan (though of course Accept.inc has highly competitive rates with no additional fees), neither do house sellers only care about the highest offer. Because all-cash offers are attractive to sellers due to their certainty and speed, buyers with cash in hand have morhe negotiating power over those with traditional financing. Whether that means you can make a lower offer or you ask for extra concessions, the power of cash is undeniable in both a seller's and a buyer's market. Are you ready for your next Denver house offer to win? Get started by becoming Cash Approved™ today.
Kelly K. | Nov 22, 2021
How to Make a Cash Offer with a Mortgage in Denver
Did you know all-cash offers in real estate accounted for 36% of home sales in 2020? You might be thinking: How do so many homebuyers have enough cash laying around to buy an entire house in an expensive city like Denver? Or, how will I ever compete against all those institutional investors scooping up all the available houses on the market? There's good news. There's a way for you to buy a house with cash, even if you don't have the full amount of cash ready and waiting in your checking account. The secret lies in partnering with Accept.inc. We’re here to level the playing field for everyday buyers like you, by making it possible to buy a house with cash but pay for it over time with a mortgage. If paying for a house with cash, while also being able to pay it back with a mortgage, sounds complicated or risky, we're here to assure you it's not. The process for becoming a cash buyer is straightforward -- we promise. Step 1. Get Cash Approved™ It begins with you completing our Cash Approval™ form letting us know you're interested in buying a house with cash in Denver. We'll work with you to start your loan application and discuss your loan options with you. Then we begin the full underwriting process. This is entirely different from other lenders' so-called "preapproval", which just kicks the actual underwriting process down the road for you to deal with later. The Accept.inc Cash Offer approval may take slightly longer than a traditional lender’s 30-minute pre-qualification, but once you are Cash Approved, you can immediately go out and compete with other cash offers! What this step entails You complete our online Cash Approval application. You learn about the loan options and our competitive rates.We guide you in gathering the necessary documents for our underwriting process -- the same documents you'd need for traditional underwriting. What takes traditional mortgage lenders an average of 58 days to process, can be performed in as little as 72 hours with Accept.inc. During this step, we work with you to determine the earnest money and down payment amount you will use in your cash offer. Step 2. Find the home you want to buy Next, you and your real estate agent will begin the fun part of buying your dream house in Denver or the surrounding areas -- looking at houses you want to buy! Your agent can guide you through all the tough decisions about what's on your must-have and nice-to-have lists, whether it's neighborhoods, features, or total house budget. You are not restricted in which real estate agent you work with or which properties you can look at. Hit the open houses with the confidence that your Accept.inc Cash Offer lets you negotiate and craft a bid as compelling as any other cash offer. When you find the house you want, your agent will send the property details to Accept.inc to conduct a value check process. We do the value check at this stage, so you can skip the appraisal contingency in your offer. Another benefit to a cash offer! What this step entails You and your agent find the home you want to purchaseYour agent works with Accept.inc to get approval on the offer amountWe work together to determine the earnest money deposit and down payment amountsYour all-cash offer is submitted to the seller with Accept.inc's proof of funds. Don't forget: because you're making a cash offer, there's no financing contingency either! Your underwriting was already completed during Step 1. Step 3. Win the home An all-cash offer can improve your chances of making the winning offer by 4X. Once a seller approves your bid, we will work with you and your agent to finalize the purchase. What this step entails Once a seller accepts your all-cash offer, the house is purchased using Accept.inc’s cash. This allows us to reserve the home for you until your mortgage is ready to close. From here, you can schedule an inspection on the home. The seller’s contract with Accept.inc is contingent on your satisfaction with the inspection report. As with a regular real estate transaction, you and your agent have complete control over negotiations during the inspection period. We will only purchase the home if you’re satisfied with its condition or you’ve negotiated with the seller and reached a resolution.After Accept.inc purchases the home, it will be sold back to you with a mortgage for the exact same purchase price without any hidden fees or markups. Step 4. Close and take possession As soon as the mortgage is ready to close, you take title and move into the home! Once your real estate agent hands over the keys, it’s time to celebrate! Ready to make a cash offer? Take the first step. It's a myth that the only people having success in the Denver real estate market in the past year were either on the selling side of the transaction, a deep-pocketed investor getting creative with financing options that a normal person doesn't have access to, or someone who happened to have a lot of cash sitting around from their own recent home sale. You, too, can make your next home offer an all-cash offer … and pay it back like a traditional home loan. All the advantages of paying with cash, without needing all that cash on hand! To recap, here is how to make an all-cash offer with a mortgage: Start the Accept.inc Cash Approval processFind the home you want to buyMake your Accept.inc-backed cash offerAccept.inc buys the home on your behalf with cash and then sells it back to you at no additional costClose and move in! Ready to get started and become Colorado's latest proud homeowner? Get Cash Approved today.
Kelly K. | Sep 17, 2021