In the last episode, we talked about 0-3% down payments. In this episode, we are going to talk about everything else about a mortgage: interest rates, closing costs, points to pre-pay interest, cash offers, and waiving contingencies. Dan and Tim talked about fixed interest rate vs ARM (Adjusted Rate Mortgage) vs interest-only mortgages, and under what circumstances each of them makes sense. The cash offer is something we see more and more often in this crazy market. Other than some ultra-rich, some people are able to do a full cash offer by refinancing their first house, take the equity out and buy the second one in cash, with the hope that they are able to sell the first one ASAP in this hot market. Although a cash offer certainly gives you an edge, it is not without risk. Waiving contingencies is another thing we see quite regularly now. As someone who is considering buying a house himself, Tim said he will "never waive certain contingencies like a house inspection." If that means he can't get the dream house fast enough, then "so be it." Like every other major purchase, before you start the house-hunting journey, educate yourself, and be financially prepared so that you can position yourself and optimize the possibilities.
