New answers tagged cash
5
It is a zero-sum game between you, the dealer, and the bank, so the key question is: if you take this loan and pay it after a month, who will be the loser in the end, as compared to the scenario in which you pay in cash and do not get the reduction of 1500$?
I see three possibilities:
(i) The loser will be you because of a trap in the fine print of the ...
4
The dealer is pushing because he gets a sales commission for placing you into that loan.
However, there's a flipside. When loans include sales commissions, they typically have early-exit charges. These exist to reimburse the lender the cost of the sales commission.
He's not mentioning that.
Otherwise, yes, salesmen and customers would conspire to ...
11
It's important to note that there can be lots of variations in a given, specific scenario. Dealers may behave differently on different deals over time, and there may be specific reasons behind that which we will never know.
That said, speaking generally, the biggest reason why dealers prefer finance for some cases is when they are getting a kickback from ...
52
The dealer makes money on the loan. The amount depends on the relationship between the dealer and the finance company. Basically, you getting a loan increases the dealer's commission and so you can indeed negotiate a lower price. The dealer may also have incentives to close x number of loans per month, so he could have additional motivations.
He's probably ...
1
The other answers have focused on the likelihood of a sale falling through, but I think there is another side to this.
Given two otherwise identical buyers, if both can borrow the same amount of money, the one with the larger deposit can potentially afford to pay more for the property. Knowing the size of the buyer's deposit is to the seller's advantage if ...
1
Here are some reasons sellers might care about the down payment amount:
Bigger isn't always better, but generally, as the size of the down payment goes towards $0, the likelihood of the deal falling apart due to financing problems increases. There is probably a point of diminishing returns though, say around 5% or $10k (whichever is greater), after which ...
8
A personal story, previously shared in an answer to another question:
For the last house I sold, the buyer was doing a no-money-down mortgage and had no money for a down payment. He was even borrowing the closing costs. We accepted the offer, but when the bank did the appraisal, it was short of the purchase price. For most home sales, this would not be a ...
8
Because, ultimately, the seller is likely going to have multiple offers for the house and will have to decide which to go with. In that situation, one of the most important weighing factors is: how likely is the seller going to manage to get to the finish line? Because there's actually a really long time between when an offer gets accepted and when the ...
94
They want to gauge the chance of a successful sale. There's nothing quite as frustrating when selling and moving to a new home as getting into escrow, doing all the paperwork, crossing off all the check lists, only to find out that your buyer didn't qualify for the loan and the mortgage fell through.
By asking about your down payment (20% or more is often ...
19
If the appraisal is less than the purchase price and the down payment is small, the bank might not approve the mortgage.
9
Bank accounts (or other pay-service equivalent) are generally not designed to be shared with people who are not registered directly on the account. If you share your account with someone else you can and will be held liable for anything they do on/with the account. This includes being held responsible for any debt, fraud, illegal activity (money laundering, ...
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