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Should I pay cash for a $300,000 home or put down a large down payment (50%)? We have no debt.

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July 31 2010 - Lincoln
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Well...how much do you have in your nest egg and how much would the $300K subtract from that? It's as simple as that. Abundance....Lyn.

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September 17 2010
It's never stupid to be without debt, but how much will be left in your nest egg after paying the whole thing?

right now with rates being so low it may be a good idea to finance and keep some of that cash in case of other contingency. Remember 5 or 10 year rates are amazing.  ARMs are under 3%, and if they shot up in 6 years you'd be able to pay it off in one lump.  In the mean time, MORTGAGE INTEREST IS TAX DEDUCTIBLE.

If you have this money lying around, I assume you have a good tax person or accountant on tap, ask them their advice. 
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September 17 2010
I would suppose it would depend on how much reserves you would have after paying cash....  Sweet problem :)
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July 31 2010
In order to provide you with a sensible educated question, there are too many issues to take into consideration other than the fact that you have no debt and want to buy a $300,000 with a 50% downpayment.  It would be best for you to sit down with either a financial consultant, a lender or your accountant and discuss with them, the reason for which you want to buy the home, the purpose (rental-owner occupied, etc) and term of your investment.  The best of luck! 
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July 31 2010
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Getting a mortgage will more than likely cost you over $1,000.

You will probably pay about 5% interest.

In a bank account now you may get 1.5% interest.

The math points to paying cash.

You say "What about the mortgage deduction?"

I say you can write off maybe 1/3 of the money you throw away on interest. Talk to a CPA for your real best suggestion but somehow I do not think throwing away 2/3 of your money spent on interest makes much sense.

Look at the state of the economy and foreclosures near you. You may be much better off to wait awhile before buying.

looking at www.housingpredictor and clicking on your state can give some ideas of what they expect to happen to house prices in your state and why.
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July 31 2010
 
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