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Answers (8)
- khiyeuem
- Contributions:32
If you want to be a king, you must had a power in your hand = $$$ additionally you can deduct mortgage interest tax benefit.
- Metro Indy Expert.
- Contributions:197
Cash is king in today's world and it may get you a better price however in the economy we are in it's wise to keep money in the bank where you can have access to it. Rates are so low that's it's almost best to use the banks money.
- Paul Kaplan, "Modern RE Group"
- Contributions:295
I would suggest you talk to your financial planner to see what makes the most sense based on your current situation and future goals.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
When you pay cash for a home the only way to access that money is by refinancing or selling the property. With 30 year fixed rates in the high 3's to low 4's does it make sense to not take advantage of that?
- Caroline Choi, "Caroline Choi"
- Contributions:98
Hi tvance650, it really depends on what's important to you right now. Would you rather pay all cash for a property and not have to worry about mortgage payments? Would you rather put a sizable down payment down, still take advantage of the low interest rates, and use the rest of the cash as a rainy day savings? Or maybe reinvest the money you're not using into something that would yield a better return-on-investment. Do you have a family? Does your family have 2 incomes? Is your income steady?
These are just some of the questions you need to answer before you can decide which will be the better option for you at this point in time. Sure, having no mortgage is great, but sometimes being able to leverage your money is better -- all depends on your personal situation. I trust you will find the perfect answer to suit your needs.
Best of luck,
Caroline
These are just some of the questions you need to answer before you can decide which will be the better option for you at this point in time. Sure, having no mortgage is great, but sometimes being able to leverage your money is better -- all depends on your personal situation. I trust you will find the perfect answer to suit your needs.
Best of luck,
Caroline
- Dan, "the_country_hick"
- Contributions:4695
Low interest rates are kicking your behind.
Look at a mortgage calculator. Do a $100,000 at 5% then at 7%. You will find a 23.9% difference in buying power from that 2% difference. That effectively means a $200k house is turned into a $152k house at the same monthly payment. Look at 4% to 8%. Now interest rates are in the low 4% range. 8% is not a bad rate at all.
We will see higher interest rates in our future. There are many reasons for it including the federal debt sucking up all kinds of money so you and I can not borrow it cheaply.
Take a look at the 2 blogs below. They may give you some reasons to consider waiting awhile longer to buy. I wanted to buy years ago and the bubble priced me out. Now I am patiently waiting for prices to normalize once more. 2002 levels are still to high by historic standards.
"10 valid reasons to wait to buy a house."
"Do low interest rates really make it a good time to buy a house?"
Look at the link below. It shows expected price changes. The numbers say to wait and preserve your money for awhile longer.
Idaho
Look at a mortgage calculator. Do a $100,000 at 5% then at 7%. You will find a 23.9% difference in buying power from that 2% difference. That effectively means a $200k house is turned into a $152k house at the same monthly payment. Look at 4% to 8%. Now interest rates are in the low 4% range. 8% is not a bad rate at all.
We will see higher interest rates in our future. There are many reasons for it including the federal debt sucking up all kinds of money so you and I can not borrow it cheaply.
Take a look at the 2 blogs below. They may give you some reasons to consider waiting awhile longer to buy. I wanted to buy years ago and the bubble priced me out. Now I am patiently waiting for prices to normalize once more. 2002 levels are still to high by historic standards.
"10 valid reasons to wait to buy a house."
"Do low interest rates really make it a good time to buy a house?"
Look at the link below. It shows expected price changes. The numbers say to wait and preserve your money for awhile longer.
Idaho
The boost in home sales produced by federal stimulus tax incentives wound down quickly in Idaho, one of the most troubled states in the country in terms of foreclosures. Home prices have been rapidly declining in just about every market in the state, despite its picturesque beauty.
However, there are some promising signs for the state as its markets sustain the downturn in real estate. The inventory of homes listed for sale is dropping in most areas of the state as bargain hunters come in to buy up foreclosures and short sales. Unemployment is hurting Idaho, where the boom in housing once hit record heights, but some employers are talking about hiring back workers.
- Jim Paulson, "BoiseREbroker"
- Contributions:327
This is a great question that is best left for your personal financial advisor to address since they know your tax situations and your risk tolerance. The main question is how much are you netting from your investments now and does that exceed the after tax interest rates you would pay buying with a mortgage.
With interest rates this low, it is worth considering borrowing the money from the bank since you might be able to write off the interest expense and simultaneously invest the difference. If your money is in a CD and that is your risk tolerance, just pay cash.
As you can see from my "wishy / washy" answer, there is no one answer that applies to everyone!
With interest rates this low, it is worth considering borrowing the money from the bank since you might be able to write off the interest expense and simultaneously invest the difference. If your money is in a CD and that is your risk tolerance, just pay cash.
As you can see from my "wishy / washy" answer, there is no one answer that applies to everyone!
- Mat Grzadzinski, "Mat G."
- Contributions:17
When discussing this scenario with my clients, I remind them that financial advisors conservatively plan for a rate of return of at least 6% for a long-term investment portfolio. With interest rates currently as low as 4% right now, it seems to make sense to finance the purchase and let your money grow at a higher rate of return. Additionally, you may receive tax benefits in the form of deductible mortgage interest. There's certainly more angles to consider that you may want to discuss with your financial planner and accountant, however, in the majority of circumstances financing your purchase provides for a more efficient allocation of your funds.
How do I decide if I should pay cash or take advantage of the low interest. ?
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