However, you also have to gauge how much you are willing to spend on a house, being sure to leave money aside for any inspections, repairs, or long term living expenses.
Hope this helps!
Dave Dicecco said what I wanted to say though I have one thing to add. I don't know if you are going to need cash for anything else later or if you will still have reserves of cash or savings that you can tap. It needn't be an all or nothing situation--you could take out a 50% loan and still have cash for other projects or investments (or fun things like travel). Later, if you want to do a cash out refinance because you need the funds, the rate will be so much higher, and the lending qualifications become so much more stringent. It might be worth getting some measure of a loan for convenience. Just a thought.
Vivian Olkin, aka CrazyViv
1) Can close in about 10 days. (30 days for a loan to process)
2) If, you get in a bidding war on the Home, usually cash and close in 10 days will win the bid.
3) Never worry about a mortgage payment.(just responsible for the taxes and ins.)
2) If that is your only cash, you won't have a cash back up for anything.
3) A mortgage does help your credit score.(good if you pay on time, bad if you don't)
Hope that helps you in your decision.
Helping families for 29 years.
Ellis Group Realty, Inc.
Buying a house cash has it's pros. Some believe you should have a mortgage because the interest rates are so low that you can invest the money you would have spent on the house and get a better return on it than what you would be paying in interest.
In addition there is the current tax benefit that comes with it. Being able to write off the interest that you pay on the mortgage is like borrowing the money for well below the current rate you would be paying.
The other school of thought is paying cash for a house allows you some financial flexibility and freedom of knowing you do not have that bill hanging over your head every month and the money you would have spent on a mortgage payment you could invest. Though you would not get back the same return because your increments would be smaller over a longer period of time.
I think it comes down to personal preference and what you are comfortable with. I currently have a mortgage on my home but am working very hard to pay it off by paying extra into the principle every month. I look forward to the day I am mortgage free...Some people like the tax write off. I want the security of knowing I do not have that debt..
Ultimately I would talk to an accountant that does your taxes and see if there is a benefit for you based on your financial situation one way or the other.
Helen Adams Realty
Another factor to whether a buyer should pay cash for a real estate investment depends on how easily and quickly that real estate may be sold in the future. If you own a duplex that has no problems renting either side, then pay cash. But, if you are talking about a 100 acre farm that is in a remote rural setting where there are few buyers, then maybe not. What is the marketability of the home that you are speaking of?
i agree with all of the other answers given. It might help you to sit down with a financial analyst or a mortgage broker and/or a stock broker to understand your financial opportunities. This is a great question that you posed on Trulia. I hope to see it on Google.
Robin Faison, broker
Keller Williams Realty
The right answer for you will depend on your future plans. For instance, if you were intending to make a few real estate purchases, replace the carpets, cabinets, paint and resell, you would be better off financing the first house (this house) and paying cash for the second.
Your goals, situation and circumstances are essential to a proper answer.
Best of success.
Have a Great Day!
NC Broker Realtor
Market Street Realty
704 906 7211
Let's look at a hypothetical situation where you are purchasing a $200,000 home. By obtaining a mortgage for 100k and financing it for 10-15 yrs, you may prefer the benefit of deferring the cost of owning that home in its entirety as well as profiting from the investment of $100k if you feel confident enough that you can generate a rate of return on your investments > 4%.
AS the overall economy continues to recover it's truly a question of personal preference that depends upon your own financial situation and circumstances. The benefit of this low rate environment IS that one may defer the cost of home ownership by fixing that cost at these historically low levels in order to plan for a more comfortable future.