Is it possible to purchase a home today in the U.S. without relying on a mortgage? Yes. About 23% of U.S. homebuyers pay cash, according to Zillow’s Consumer Housing Trends Report 2018. It IS possible to buy a home without a mortgage.
Difficult But Could Be Worth Your Effort
It’s not the easiest way to go about it, but for some, owning a house outright and not paying thousands in interest charges over the life of the loan makes it worth the effort. If you have a strong desire to pay cash for your home and have the discipline to stay on a strict budget, here are a few suggestions to help you accomplish this goal:
- Live off one income – If you have a spouse or partner making a salary you can both live off, reduce your expenses so you can put your own salary into a savings account or investment product. It may take 5 or more years to save enough, depending on your salary and how much you want to save.
- Buy a fixer-upper – If you’ve saved enough to buy a modest home that needs some work, and you’re willing to put in the sweat equity to make the needed repairs, then this could be an option.
- Build your own – If you have carpentry skills, then instead of saving enough to buy an existing home, you’ll just need enough cash to buy the land and the building materials, permits, etc. This option will also require you to be creative with your living arrangements as you build your permanent home. Some people live with friends or family members and others live in trailer homes while they build.
- Sell current home for a less expensive one – If you already own a home and have paid down a good portion of the mortgage (in other words, have plenty of equity in it), you have the option of selling the house and using the profits to purchase a less expensive home.
Additional Expenses To Keep In Mind
Keep in mind that you’ll also have to save for closing costs (inspection fee, property appraisal, attorney’s fees for closing, and property taxes), as well as have enough cash left over to pay for any repairs that need to be made and to cover the usual house maintenance expenses.
If your goal is to pay cash for a house, then having a dedicated savings account or investment product will help you achieve this dream. Talk to any of our new account representatives about opening an account and to learn more about how we can help you. We have several savings vehicles that could help you make your new home a reality!