Thank you both for taking the time to answer my question. However, I was thinking, I wonder if our age would make a difference on this decison of either paying cash or taking out a mortgage. My hubby is 78. So, would they even give us a mortgage? I've been looking online and think a HomePath Mortgage on a Reo would be good. What do you all think?

Also, when a property is under contract, does that mean someone has placed an offer on it? I was told by one realtor that they had 3 contracts on one property. Can they do that? And, if so, then who gets the property? The one who made the highest offer? How does that work? Any advice would be appreciated.

Bonnie,
Anne has given you some very sound advice. I would just add that it is a personal case by case situation. If you are looking at buying a REO (bank owned foreclosure) then many times they will actually take less for a home if it is a cash offer. I have even seen them take a cash offer over a higher mortgage offer. You can always turn around later and take out an equity line if you need the interest deduction or want to put some money back in savings for emergencies.

Hope this helps,

That completely depends on your financial situation. When you pay cash you are often in a better bargaining position with the seller. If you need tax deductions, then a mortgage is the way to go. There are pros and cons for both. Cash - you've spent a big chunk of money but don't have any house payment. Mortgage you have a house payment and will spend many dollars in interest, but you've kept your cash for emergencies or other investments. Please talk to your financial advisor.