If you have a lot of equity in your home, you have a financial cushion for extreme life emergencies, but it may not be easy to change the equity into cash when you need it in a hurry. A home equity loan might be possible, but that might not be the right solution for your situation. Another possibility to consider is selling your house for cash. This frees up your money without having to go in debt. Here's how selling your home to a cash buyer can benefit you.
You Can Close Much Quicker
When you sell a home for cash, you could sell your home in just a few days without going through the process of putting your home on the market. If you are agreeable with the offer you're given and decide to sell to the cash buyer, you could close on the house in several days to a few weeks. A traditional home closing takes several weeks since the mortgage lender is involved. Selling your home for cash is a quick way to get money out of what's probably your most valuable possession.
You Can Prevent Foreclosure
If you still have a mortgage on the house and you know you won't be able to make the payments because of a divorce or loss of a job, then selling your house for cash not only provides you with extra money from your equity, it also gets you out from under your mortgage payments before your home goes into foreclosure. This could protect your credit so you don't have to spend years rebuilding your credit score once your emergency has passed and you're financially stable again.
You Won't Need To Sink Money Into Repairs
If you want to sell your home the traditional way, you'll probably need to fix up your home at least a little bit so it's attractive to buyers or your home could sit on the market for months. Fixing up your home could be impossible when you don't have the money for it. Investors that buy houses for cash often buy homes in disrepair, so you won't have to worry about putting money into the house to make it presentable. The investment would probably be a waste since investors buy ugly houses to fix them up, and they would probably redo the home anyway.
There are pros and cons to selling your money for cash to an investor. You may not get as much as you would if you sold your home using a realtor and waited for an interested buyer, but it might be worth accepting less so you can get money fast if you need it for medical or legal reasons, you need to move to another state or country fast, or if you don't have income and need money to survive and protect your credit.