How to Buy Your Home with a Cash Offer

Homeownership is now more accessible for homebuyers buying with cash.

With NAF Cash, an affiliated company of New American Funding^*, you could become a cash buyer. When backed by the strength of a cash offer, you can compete with cash buyers and potentially save money, too.

When it comes to buying a home, cash buyers often have a few advantages. Not only are their offers more likely to be accepted, but they may be likely to pay less overall than they would with a traditional mortgage.

NAF Cash, an affiliated company of New American Funding, helps to level the playing field for homebuyers, so they can compete with cash buyers to make their dreams of owning a home a reality — at a rate they can afford.

What Does It Mean to Buy a Home with Cash?

Buying a home in cash doesn't mean you need to withdraw the entire home's value from your bank account prior to purchase; it simply means that you will be purchasing the home outright without a loan from an outside source. A cash buyer pays for a home using their own funds.

The vast majority of homebuyers opt to purchase a home with funding from a mortgage, whether it's to take advantage of mortgage tax deductions or because their money is tied up elsewhere — possibly another home. However, those who have the opportunity to purchase a home in cash will find that doing so provides an array of benefits, including faster closing processes, lower costs and competitive advantages, as sellers usually prefer cash offers.

So, why buy a home with cash? A few good reasons:

• Cash offers are often more competitive. Cash offers are appealing to sellers, as they are more stable. With a cash offer, there's no waiting for approval from an outside source for a mortgage. Buyers can proceed with the home buying process without worrying that they will lose out on financing, as they already have the money in hand. Plus, in current market conditions, a cash buyer may be able to leverage the cash offer for seller concessions and a better price.
• Closing is typically easier and faster. Cash offers can speed up the home-buying process, so you can get into your new home faster. Particularly if a seller is looking to close fast, they are likely to choose a cash buyer over a buyer who is relying — and waiting — on a contingent mortgage approval.
• You can save money. Those who are willing to pay in cash are likely to save money in the long run. Purchasing a home with cash provides buyers with lower closing costs, as there is no lending fee, interest from mortgage payments, or mortgage insurance payments. Additionally, buyers can generally negotiate a lower price with the seller because they're offering an appealing and stable purchase option.

Additionally, here are some things to know about cash offers:

• If multiple homebuyers are competing for a listing, those who offer to purchase in cash are four times more likely to win a bidding war, according to Redfin.
• Cash buyers have recently made up 27 percent of all home purchases, according to the National Association of Realtors.
• Over the last two years, the median price of houses in America has increased by 28 percent, according to Slate.

Make a Cash Offer with NAF Cash

With NAF Cash, an affiliated company of New American Funding, you could become a cash buyer. NAF Cash will purchase a home upfront with cash on behalf of the buyer; once the sale is complete and the buyer has secured permanent financing with New American Funding, NAF Cash will sell the property to the homebuyer for its original price, plus a small service fee.

NAF Cash provides home buyers the chance to compete with (and win) against other cash offers in bidding wars and offers a quicker end-to-end experience. Buyers can use the program to take advantage of cash offer benefits — for example, cash buyers pay around 11 percent less than those who purchase a home with a mortgage, according to Inman — without having to shell out more money than they have available. Plus, sellers prefer the convenience and certainty of a cash sale to a purchase using a traditional mortgage.

Instead of putting plans on hold while going through the selling process of one's current home, this program helps buyers avoid missing out on their dream homes just because they haven't secured financing yet. It allows them to lock down their dream home stress-free while they work to sell their old home or secure permanent financing for their new one. This enables prospective buyers to start their lives in their new homes sooner than they would if they purchased a home with a traditional mortgage.

Requirements for NAF Cash — To take advantage of NAF Cash, buyers must meet certain criteria. To start, a buyer who is purchasing the home with a conventional loan must be willing to put down three percent of the selling price as earnest money, or a deposit that is put down "in good faith" before closing to show one's commitment to the purchase^**. Those who are purchasing a home through a VA loan may be able to pay as little as zero percent down. Regardless of the loan type, buyers are also required to maintain a minimum credit score of 620.

If you have any questions or would like assistance with navigating the process, contact a NAF Cash associate to help guide you through the steps and get you on your way to purchasing your dream home.

New American Funding: Here to Help You Buy Your Dream Home

New American Funding offers a variety of options to make homeownership a possibility for all — not just those with enough personal funding to pay for a home in cash. Their knowledgeable and professional customer service representatives are here to support prospective homebuyers on their homeownership journey by answering any questions they may have about their purchase options.

In 2022, New American Funding was recognized as #1 in customer satisfaction among mortgage servicers by the J.D. Power 2022 U.S. Mortgage Servicer Satisfaction Study. The company was able to achieve this prestigious recognition through its dedication to helping every client from every background achieve homeownership.

^*Loan products offered by New American Funding, LLC. dba New American Funding. NMLS #6606. www.nmlsconsumeraccess.org. Terms and Conditions apply. Loan products subject to credit and property approval. Not all applicants will qualify. © 2023 New American Funding, LLC. New American and New American Funding are registered trademarks of New American Funding, LLC. All Rights Reserved. Corp Office 14511 Myford Rd, Ste 100, Tustin, CA 92780. Ph 800-450-2010. 03/2023

^**3% earnest money may be forfeited to NAF Cash, LLC if borrower does not purchase the home after NAF Cash has purchased the home on borrower's behalf in cash