How quickly can you pay off a fresh mortgage if you have the cash?

I am currently in the process of buying a property. I currently have the cash to close but the sellers do not know. I decided to get a mortgage so that I can include an appraisal contingency to make sure that I am buying the house at the fair market value. If I decide to go through with the mortgage, and already have the cash to pay it all off as soon as I close, can I pay off the whole mortgage at the day of closing?

16 Answers

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  • 3 months ago

    You can do an appraisal contingency on a cash buy too. You could pay it off right away if you like.

  • 3 months ago

    Wait until your very first mortgage payment is due and then pay it off. It makes no difference, to the seller, if you have the cash or not......they just want their part.

    • Nuff Sed
      Lv 7
      3 months agoReport

      It may make a big difference to the lender who was counting on you paying interest for some agreed period.

  • 3 months ago

    It's better to simply get an appraisal. Do NOT supply the intended purchase price to the appraiser, as you would for a mortgage. If you give the appraiser a target price, they will try to justify it. Our neighbor's house appraised for $425k, because that is what they offered. This was one week after we bought our house for $340k, and got an appraisal at that price. Thing is, our two houses are identical in size and layout - they are two of five all built at the same time as a tract. The appraiser even came over to talk with us, saying he had a hard time making it work, but he did.

    Your offer is stronger when it is not contingent on a mortgage, by the way. It can still be contingent on an appraisal. And while you're at it, might as well make it contingent on a professional home inspection.

  • Tavy
    Lv 7
    4 months ago

    What a daft idea. Pay for an independent appraisal then pay in cash. We do it all of the time in the UK, why make it difficult and pay fees?

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  • Judy
    Lv 7
    4 months ago

    no, there will be some minimum time

  • 4 months ago

    The same day the money is loaned to you. But that would be silly because of all the added fees associated with taking a mortgage. And a cash purchase can still require an appraisal contingency. If you have the cash, forget about the mortgage … unless your cash does not have a legal paper trail to show how it came into your legal possession.

  • 4 months ago

    First off this is a stupid idea. You can do it ie. pay it off the day you take it out (assuming there is no pre-payment penalty which is fairly rare. if there is a prepayment penalty you can still pay it off immediately but it'll cost you even more) but just taking out the mortgage will cost you 1000's of dollars in extra fees and closing costs.

    You would be better off taking out the mortgage and investing the money you have (mortgage may be half the interest rate you could get investing wisely in stocks - but there is risk) or simply not doing the mortgage at all.

  • 4 months ago

    You can change the contract to cash before you close. Mortgages may or may not have a pre payment penalty.

  • Anonymous
    4 months ago

    Couldnt you have just made a cash offer contingent on appraisal? Also, you probably paid a point or points which will not be refunded.

    When I was younger every time I looked into all the fees, I kept putting off buying a house and eventually just paid cash. I knew it was below market and did not need an appraisal. (hud foreclosure)

    I also could not prove my income back then and the rate/fees would have been even higher for me. I was self employed and behind on my taxes so it would have to be a stated income loan. While my credit was very good, stated income loans were commonly called "liar loans" and came with higher rates & fees to compensate. (As it turns out, many of those liar loans went into foreclosure and the lenders took a bath on them)

    • A Hunch
      Lv 7
      3 months agoReport

      No doc mortgages stopped being in existence during the height of the recession. But have been back for at least 5 years (probably 7). https://www.lendingtree.com/home/mortgage/do-no-income-verification-mortgages-still-exist/

  • Lisa A
    Lv 7
    4 months ago

    That would be foolish. You will have wasted a lot of money just to get an appraisal. Hire an appraiser.

    Also, interest rates are so low, that you may just want to keep your cash, and use it for something else.

    • A Hunch
      Lv 7
      3 months agoReport

      An appraisal is $350-$500... spending this is not a waste of money however you look at it, unless you are sure you are buying below market value. Better to spend $500 than be underwater thousands.

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