Go For House Financing Or Save Money To Buy It in Cash?

Guide on Buying A Residential Property – Through House Financing or Cash?

HOUSE FINANCING – Here is a guide that you may consider in case you are in doubt whether to buy a house through financing options or to save money to purchase it in cash.

One of the biggest purchases that you can make in your lifetime is buying a house. May it be for you, your parents, your siblings – it will require a huge amount of money. It is no secret to the public that a house and lot can also be the best investment. Its value only goes higher and higher each year.

House Financing
Photo Credit: Student Loan Planner

For some people, their bank savings can really finance buying a residential property. However, truths be told that a lot of people only have two (2) options on both ends – buying a property through house financing or saving money to purchase it in cash.

In the case of financing, there are several banks and lending companies that offer cash assistance in purchasing a residential property. Of course, there is an interest. Based on an article on Home Guides, here are its pros and cons:

House Financing


  • You can enjoy the benefits of living in your own house while paying for it in monthly installments.
  • Your savings will not experience a rapid downtrend due to a huge payment you will have to make if you buy it in cash.
  • You can use your money in some other opportunities like business where it can grow.
  • It is an excellent option for people who have lower income and struggle in saving a huge amount of cash.


  • The interest may be very high although you are having lighter installments.
  • Your house may serve as the collateral for the loan and you may lose it in case you fail to cope with the monthly payments.
  • A lot of requirements need to be prepared in applying for financing.

Cash Payment


  • It is a one-time payment and you won’t anymore have to bother yourself with monthly amortizations.
  • You can skip the interest rates and other processing fees that are part of what you have to pay for in case you opt for financing.
  • Your house is really yours after making the cash purchase.


  • If you are still saving, it may took several years before the purchase can actually take place depending on the type of house you want.
  • If you have just enough in your bank account, you might ran out of money right after the purchase. There are still daily living expenses that you have to consider.

Which is better, buy a house through financing or cash payment?

The answer to this question may differ from person to person depending on the situation. It is you who can assess which is better for you depending on your target house, your savings, your monthly income, your plans, etc.

Thank you for visiting Moneysense.co. Rest assured that we will continue to post articles that can help secure you financially.

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